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2014 (11) TMI 707 - AT - Central ExciseMODVAT Credit - Whether penalty is imposable under Rule 57 (I) (4) of CER for the period 23.07.1996 to 28.09.1996 - Held that:- Respondents have not reversed the Modvat credit availed on the goods ie., controllers, drivers etc., cleared to their customers as warranty replacement. Both the contravention of Rule 57(I) and suppression of facts were clearly brought out in the show cause notice as the respondents have cleared the goods to their customers as warranty replacement without following any of the procedures prescribed under Central Excise Rules. Further, it is seen that the adjudication authority in his order dated 21.12.99 has clearly discussed in his findings for invoking extended period and imposition of penalty under Section 11 AC read with Rule 57(I) of the CER. Penalty is not imposable for the period prior to 23.07.1996, as the provision under 57(I) came into effect from this date and also set aside the penalty for the subsequent period. The Revenue has clearly brought out in the show cause notice and in the adjudication order, the contraventions, suppression of facts with intent to evade payment of duty, as the respondents have cleared the modvatable inputs to their customers as warranty replacement without reversing the modvat credit taken on them and without following any procedure prescribed under the Central Excise Rules. Once the contravention of Rule and suppression of facts have been proved for invoking penal provisions stipulated under Section 11AC read with Rule 57(I) (4) of CER, the imposition of penalty becomes mandatory on the part of adjudicating authority. penalty is imposable under Rule 57(I) (4) of CER read with Section 11AC of CEA, pertaining to the period from 23.07.1996 to 28.09.1996. - Following decision in UOI Vs. Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] - Decided in favour of Revenue.
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