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2005 (2) TMI 235 - CESTAT, NEW DELHICenvat/Modvat - Inputs - Manufacture - Scrap - process of debarring and smoothing of edges and surface - Penalty - HELD THAT:- We find force in the submissions of the learned SDR that as no goods have been received by the assessee, the question of availing of Modvat credit does not arise. The Modvat credit is available either on the inputs or on the capital goods. The charges paid towards erection of the plant and dismantling are neither inputs nor capital goods. In the case of Eveready Industries India Ltd. v. CCE, Allahabad [2000 (2) TMI 152 - CEGAT, NEW DELHI], the goods were received by the assessees and the issue involved was whether packing or forwarding charges should have been included in the assessable vable of the inputs. In the present matter, as observed by us, no goods have been received. Further, the Division Bench of the Tribunal has held in NTTF Industries Ltd.[2004 (3) TMI 540 - CESTAT, BANGALORE] that no duty is required to be paid on design and development charges nor the charges are excisable goods and, therefore, the question of allowing the Modvat credit of duty paid on such charges does not arise. Accordingly, we set aside the impugned Order in respect of allowing the Modvat credit on dismantling and erection charges. The learned Chartered Accountant has also submitted that the penalty imposed by the Adjudicating Authority is on the higher side. We agree with the learned Chartered Accountant that it is not a fit case for imposing the penalty equal to the amount of Modvat credit involved. The penalty is certainly imposable on the assessee as they had wrongly taken the Modvat credit. The penalty of Rs. 20,000/- will meet the ends of justice. We impose a penalty of Rs. 20,000/- on the assessee. Both the appeals are disposed of in the manner indicated above.
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