2006 (1) TMI 344

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....he Revenue proceeded against the appellants for denial of Modvat credit of CVD of Rs. 15,39,877/- for their failure to produce the requisite certificate/documents from KSFC in accordance with the provisions of Rule 57R of the erstwhile Central Excise Rules, 1944. The Original Authority apart from denying the Modvat credit, imposed a penalty of Rs. 50,000 under Rule 173Q for the contravention of Rule 57G read with Rule 57R. The Commissioner (Appeals) upheld the Original order in his Order-in-Appeal No. 218/2002-C.E., dated 28-3-2002. This is the impugned order which is strongly challenged by the appellants. 2. Shri G. Shivadass, learned Advocate appeared for the appellants and Shri K.S. Reddy leaned JDR appeared for the Revenue. 3.&em....

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....mpany to the effect that the duty specified on such capital goods has been paid by the said manufacturer to such financing company prior to payment of first lease rental instalment or first hire purchase instalment or first instalment of re-payment of loan, as the case may be, along with a copy of the agreement entered into with the said financing company. (iii)    The manufacturer and the financing company shall not claim depreciation under the Income Tax laws on that part of the value of capital goods which represents the amount of specified duty paid on such capital goods." A careful perusal of the said Rules reveals that in order to claim the Modvat credit, the appellant should have repaid the countervailing duty before....