Wrong Modvat Credit - Penalty under Rule 173Q (bb) - Regarding - Central Excise - 6/92-CX.8

Wrong Modvat Credit - Penalty under Rule 173Q (bb) - Regarding Circular No. 6/92-CX.8 Dated 3-2-1992 [From F. No. 267/71/91-CX.8] Government of India Central Board of Excise Customs New Delhi Subject : Wrong Modvat Credit - Penalty under Rule 173Q (bb) - Regarding. I am directed to say that instances have been brought to Board's notice in respect of wrong Modvat Credit, when the point regarding not having sufficient balances in the PLA was not taken into consideration while reversing the wrong credit. Similarly, while imposing the penalty in some cases, the amount of penalty was not in proportion to the interest which would have been charged had the money been taken as loan from the Banks, financial institutions etc. 2. Instructions may please be issued to all the divisional offices and the adjudicating authorities in your collectorate to keep these two important points into consideration while passing orders reversing the wrong credits. 3. Please acknowledge receipt of this circular.