TMI Blog2007 (7) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... of CETA, 1985 and availing Modvat credit facility under Rule 57A of Central Excise Rules, 1944. On 1-2-1997, there was a balance of Rs. 1,70,621.08 in the RG-23A Part-II account of the appellants. During the period 13-2-1997 to 18-2-1997, the appellants received inputs i.e. M.S. Scrap from unregistered dealers. The appellants recorded the same in RG-23A Part-I register. Subsequently on 26-2-97 and 27-2-97, the appellants cleared the M.S. Scrap on payment of duty by debiting the amount of duty in RG-23A Part-II. Show cause notice was issued to the appellants for illegal utilization of credit on the ground that the M.S. Scrap cleared by the appellants was received without payment of duty and show cause notice was also issued to show as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant, it is his submission that provisions of Rule 57F(1)(ii) is not applicable and penalty imposed under Rule 173Q is correct and there is no justification for interference in the impugned order. 5.Considered the submission made at length by both sides and perused the records. It is on record that the appellants had received M.S. Scrap from non-registered dealer during the period 13-2-1997 to 18-2-1997. It is also undisputed that the appellants have recorded the receipt of M.S. Scrap in RG-23A Part-I. It is also the undisputed facts that the appellants had informed the Revenue of the clearance of very same scrap under invoice No. 30 to 45 dated 26-2-1997 and 27-2-1997 by debiting the amount in RG-23 Part-II. It is also on record that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty was paid. Hence, the contention that the inputs are removed as such on payment of duty under Rule 57F(l)(ii) incorrect and are not sustainable. 6.As regards the arguments put forth by the learned Advocate that there was no short payment of duty and non-payment of duty and hence provision of Section 11A cannot be invoked for recovery of Modvat credit, it is seen from the record that show cause notice was issued for recovery of amount under provision of Rules 9 and 57-I of the Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944. Provision of Rule 57-I (l)(i) reads as under :- "Where credit of duty paid on inputs has been taken on account of an error, omission or mis-construction, on the part of an offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not required to do. Hence, I do not find any infirmity in the orders of the lower authorities of confirmation of demand. 8.The order as regards to imposition of penalty upon the appellants, it is seen from the record that the penalty has been imposed on the appellants under the provision of Rule 173Q of Central Excise Rules, 1944. The provisions of Rule 173Q are as under :- "(1)Subject to the provisions contained in sub-rule (4) of Rule 57-I and sub rule (5) of Rule 57-U, if any manufacturer, producer, registered person of a warehouse or a registered dealer - (a) removes any excisable goods in contravention of any of the provisions of these rules; or (b) does not account for any excisable goods manufactured, produced or sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner (Appeals) that the appellants have deliberately utilized the credit lying in balance towards payment of duty on the M.S. Scrap, shown in their RG-23A Part-I account but which had admittedly, received without the cover of any duty paying documents and on which no credit had been raised in their RG-23A Part-II account and the appellant had passed on impermissible Modvat benefit to the purchaser. As such, I find that the penalty imposed on the appellant is correct under the Rule 173Q. Since the amount involved in this case is Rs. 2,04,621/-, a penalty of Rs. 2 lakhs is excessive. To meet the end of justice, I reduce the penalty from Rs. 2 lakhs to Rs. 1 lakh. 9.Accordingly, the impugned order is upheld to the extent it upholds the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
