TMI Blog2004 (1) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... of which the Commissioner has : (i) Demanded a sum of Rs. 2,49,55,313/- under Rule 57-I of the Central Excise Rules, 1944 allegedly representing Modvat credit irregularly taken; (ii) Imposed a penalty of Rs. 1,79,41,162/- under Rule 57-I(4) of the Central Excise Rules, 1944; (iii) Imposed a penalty of Rs. 80 lakhs on the Company under Rule 173Q of the Central Excise Rules, 1944; (iv) Imposed a penalty of Rs. 5 lakhs each on Shri B. Nagi Reddy, Director - Operations and Shri. K. Rami Reddy, General Manager, under Rule 209A of the Central Excise Rules, 1944. (b) During the period April, 1995 to August, 1999, the Company imported consignments of chemicals for use as raw materials in the manufacture of the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er again, in spite of the fact that the appellants had sent all the amounts in question through demand drafts in favour of the Commissioner of Customs. (c) As a sequel to the above proceedings, the present SCN dated 28-3-2000 was issued to the appellants proposing to deny Modvat credit of 74 Bills of Entry received by the appellants during the period 2-4-1995 and 30-8-1999. (d) The Commissioner of Central Excise, after accepting that the proceedings under the Customs Excise Act for disallowing the credit and the recovery of duty under Customs Act initiated by Chennai Customs, are interrelated, has, however, passed the impugned order rejecting the contention of the appellants and holding that the proceedings are interdependent to arrive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny has sent the required amounts including the amounts of Basic Customs duties by demand draft addressed to Commissioner of Customs, Chennai. They which have been found to have been credited in the Government Treasury as Revenue. Rule 173Q(1)(bb) mandates that only if credit is taken which a manufacturer knows or which he has reasons to believe was not permissible under the rules then only penalty could be imposed. Since no material has been found, to implicate the Company and its Directors Shri Rami Reddy (General Manager) one of the appellants herein, to be part of the design of the Clearing House Agent in removing the goods in an unauthorised manner and supplying the same to the appellants. The penalty under Rule 173Q(1)(bb) cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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