TMI Blog2001 (12) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, disallowed Modvat credit and imposed penalties on all the three appellants, namely, M/s. Nirmal Overseas Ltd., Shri R.K. Aggarwal, Chairman and Shri O.P. Karnani, Manager of Nirmal Overseas Ltd. 2. Shri G.L. Rawal, learned Advocate, submitted that the appellants manufacture HF/RF induction welders, welder panels, drives, tube mill, etc.; that the search of their factory premises on 12-12-1998 by the Central Excise officers resulted in issuance of show cause notice dated 25-8-1999 on the following grounds :- (i) During the search it was found that parallel invoices were issued and the Excise duty evaded was Rs. 8,33,148/-, (ii) Wrong availment of Modvat credit amounting to Rs. 21,83,987/-, (iii) Short payment of Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act cannot be imposed as it is settled law that penal provisions are always prospective in nature; that the alleged evasion of duty on all account is prior to 28-9-96 when these provisions came into force. Reliance was placed on the decision in the case of Lakshmi Packaging (P) Ltd. v. CCE, Coimbatore, 1998 (98) E.L.T. 91 (T). 4. The learned Advocate, further, mentioned that penalty of Rs. 21,83,987/- has been imposed under Rule 57-I(4) of the Central Excise Rules which was not invoked in show cause notice; that 100% penalty can be imposed if the credit has been taken fraudulently, by wilful mis-statement, etc. which was not alleged in the show cause notice; that the Supreme Court in the case of CCE v. H.M.M. Ltd., 1995 (76) E.L.T. 497 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, credit availed of basic Customs duty, credit availed of in excess, credit availed of in respect of inputs not declared by them, etc. The appellants have reversed the Modvat credit and according to them it was bona fide mistake. In this regard the learned Advocate had also referred to their letter dated 4-2-99 in which they had reported debitting of Modvat credit amounting to Rs. 18,23,444/- taken in respect of goods received under DEEC Scheme. Accordingly, we uphold the reversal of Modvat credit ordered in the impugned order. Similarly, the appellants had deposited the duty amounting to Rs. 77,391/- short-paid by them. We uphold the said demand of duty also. The Commissioner has also confirmed the demand of duty Rs. 8,34,588/- on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be demanded from them. We order so. Coming to penalty imposed under Rule 57F(4) of the Central Excise Rules, we observe that the said sub-rule was invoked in the show cause notice for imposing penalty. This sub-rule provides for imposition of penalty equivalent to the credit disallowed where the credit has been taken wrongly by reason of fraud, wilful mis-statement, collusion or suppression of facts, or contravention of any of the provisions of the Act or the Rules with intent to evade payment of duty. There is substance in the submissions of the learned Advocate that none of the ingredients mentioned in Rule 57-I(4) was mentioned in the show cause notice. It has been held by the Apex Court in H.M.M. Ltd., supra, that the notice must put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat interest of justice will be met if penalty imposed on M/s. Nirmal Overseas is reduced to Rs. 7.5 lakhs, on Shri R.K. Aggarwal to Rs. 2.5 lakhs and on Shri O.P. Karnani to Rs. 50,000/-. We order accordingly. 8. Thus all the three appeals are disposed of as under :- (i) Duty demand of Rs. 77,391/- is upheld. (ii) Duty demand of Rs. 7,01,440/- out of Rs. 8,34,588/- is upheld. (iii) The appellants to furnish proof of export in respect of Invoice No. 26, dated 13-9-96. In case of failure to produce the certificate to the satisfaction of the adjudicating authority, remaining duty of Rs. 1,33,148/- will be payable by M/s. Nirmal Overseas Ltd. (iv) Denial of Modvat credit Rs. 21,83,987/- is upheld. (v) Penalty imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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