TMI Blog1999 (5) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... ke paraxylene and methanol were received under duty paying challan, the assessees caused weighment to be done. Credit was taken on the quantity actually received and not on the basis of the quantity shown in the duty paying documents. However, with effect from 9-5-1995, although the assessees continued to weigh and ascertain the actual quantity received, they took Modvat credit on the quantity shown in the duty paying documents. The department came across the data regarding weighment and observed that during the period September, 1995 to March, 1997, the duty leviable on the material short received amounted to Rs. 15,69,878. The assessees voluntarily deposited this amount on 11-4-1997. Even then, on 12-5-1998, the show cause notice was issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaks of inputs ....... received in the factory. The Commissioner has held in the order that this rule indicates that the credit has to be restricted to the physical quantity of the inputs that is received. We also find that in terms of Rule 57A(4) the credit is allowed on the inputs used (emphasize supplied) in the manufacture of final product. These two provisions put together suggest that the Modvat credit can be taken on the actual quantity received in the factory which quantity is used in the manufacture of the final product. 8. We have also taken cognizance of the submissions made by Shri Parthasarathy. It is correct that where the goods are not subjected to weighment on receipt, the assessees would be permitted to take the Modvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit wrongly taken. On the other hand, we find that there was little cause for imposing penalty. As Shri Parthasarathy rightly submitted, if the assessee had not weighed the inputs, they would have taken total credit on the inputs received. He is also correct in pointing out that the majority of the assessees who do not take weighment may be claiming Modvat credit where less inputs are received. In this situation, where the assessees due to his own action has been subjected to payment which over assessees are not subjected to, there is little reason to uphold the order of the Collector. We, therefore, hold that the ld. Commissioner was right in confirming the demand but not right in imposing the penalty. We confirm the orders of demand a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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