TMI Blog2012 (7) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... em - no reason to impose any penalty on the respondents - denial of Modvat credit upheld, penalty is not required to be imposed- - Excise Appeal No.1171 of 2005 - - - Dated:- 30-1-2012 - Ms. Archana Wadhwa, Mr. Rakesh Kumar, JJ. Present for the Appellant Shri R.K.Varma, DR Present for Respondents Shri Nikhil Aggarwal, Adv. Per Ms. Archana Wadhwa: As per the facts on record, the respondents are engaged in the manufacture of chewing gum/bubble gum falling under Chapter 17 of the 1st Schedule of Central Excise Tariff Act. Proceedings were initiated against them for denial of Modvat credit to the extent of Rs.70,90,852/- availed in respect of Boomer Tattoo (new design)/ Printed Transfers, during the period September, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise Act, 1944 and Section 11AB of the said Act. The respondents are also liable to be subjected to penalty of equal amount in terms of Rule 13(2), read with Section 11AC of the Central Excise Act, 1944. Order accordingly. Appeal is allowed with consequential relief. 3. As is seen from above, apart from denying the benefit of Modvat credit of duty, the Tribunal also observed that the respondents are liable to be subjected to penalty of equal amount in terms of provisions of Rule 13(2) read with Section 11AC of Central Excise Act, 1944. 4. Being aggrieved with the above observations and findings of the Tribunal as regards penalty, the assessee filed a reference application before the Hon ble High Court of Punjab Haryana a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is not sustainable. The matter is remitted back to the Tribunal to consider the question as to whether any penalty is imposable keeping in view the earlier order of the Adjudicating Authority and the extent and nature of default, if any, committed by the appellant. 6. Accordingly, the matter stands remanded to the Tribunal for consideration on the point of imposition of penalty. 7. We have heard both the sides on the above issue. We find that the show cause notice issued on 03.10.02 refers to scrutiny of ER-1 returns filed by the respondents for the period September 2001 to August, 2002. As such, it becomes clear that fact of taking Modvat credit in respect of disputed items was being represented by the respondents in the ER-1 retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity and is required to be followed in the present proceedings. For the said reason, the penalty in the present proceedings is required to be held as not imposable on the respondents. 10. Apart from above, we note that the Commissioner vide his impugned order has himself dropped the demand against the respondents on merits. As such it can be safely concluded that the issue involved in the present appeal is of legal interpretation of the provisions of Modvat Rules and is capable of interpretation in favour of the assessee also. As such the respondents cannot be faulted upon for availing the benefit of Modvat credit in respect of Tattoos so as to impose penalty upon them. For all the above reasons, we find no reason to impose any penalty on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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