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M/s Dhillon Kool Drinks & Beverages Ltd. Versus CCE, Rohtak

Demand of duty - Rule 8 of Central Excise Rules, 2001 - the facility of fortnightly payment of duty and payment through RG 23A Part II for a period two months or till the deposit of defaulted amount which ever later was withdrawn - appellant took credit in their PLA account without actually deposit of the same through TR-6 challan – manipulation of account current and misleading – Held that: - the appellant has paid whole of the defaulted amount alongwith interest on 17.10.2001. These facts are .....

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1 by utilizing the credit account for payment of duty with effect from 18.1.2002, therefore, the demand of ₹ 1,69,38,241/- is not sustainable - Demand set aside - no penalty imposable. - Manipulation of account current - fraudulent credit taken in account current on TR-6 challan and an amount of ₹ 1,69,38,241 has been utilized by the appellant from their cenvat credit account for payment of duty – demand of said amount along with interest and imposition of penalty – Held that: - .....

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he amount in dispute was paid alongwith interest before issuance of show cause notice, thus, the penalty is reduced to 25% of ₹ 1,63,00,000/- - Imposition of penalties on co-appellants – Held that: - co-appellants are the responsible officials of the appellant company. They have admitted their mistake, in that circumstance, the imposition of nominal penalty on both the appellants shall meet the end of justice - the penalties on both the appellants confirmed for their mistake to the tun .....

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hout support of valid TR-6 challan and utilized towards payment of central excise duty. A demand of ₹ 1,69,38,241/- was also confirmed on account of duty paid by utilizing their account current and various penalties imposed on the appellants, Aggrieved with the said order, the appellants are before us. 2. The facts of the case are that by an order dated 24.9.2001 in terms of Rule 8 of Central Excise Rules, 2001, the facility of fortnightly payment of duty and payment through RG 23A Part II .....

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in their account current. Whereas the appellant took credit in their PLA account without actually deposit of the same through TR-6 challan. Therefore, it was alleged that the appellant instead paying defaulted amount manipulated their account current and tried to show that the default amount had been paid and accordingly restored to facility of fortnightly payment of duty on their own with effect from 18.1.2002 and started paying duty from the cenvat account. Therefore, it was alleged that durin .....

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s not entitled to utilize the said cenvat credit for payment of duty, they did not clear the defaulted amount before restoring to the facility of fortnightly payment of duty. It was also alleged that the appellant manipulated the account current by showing that they paid more than the TR-6 challan. Therefore, the total amount of default ₹ 3,32,38,241, out of this an amount of ₹ 1,63,00,000 pertains to fraudulent credit taken in account current on TR-6 challan and an amount of ₹ .....

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were also imposed. 3. Shri Kamaljeet Singh, Advocate, learned Counsel for the appellant submitted that vide order dated 24.9.2001 the facility of fortnightly payment of duty and payment through RG 23A Part Il for a period two months or till the deposit of defaulted amount which ever later was withdrawn. It is his contention that the appellant has paid defaulted amount on 17.10.2001 which is evident from RT 12 returns. Therefore, after 24.11.2001, they were entitled to avail cenvat credit account .....

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ess. On realization of their mistake and on pointing out by the department, they have paid the whole amount of excessively taken as credit in their account current alongwith interest on 9.3.2002 and 15.3.2002, therefore the penalties on the appellants are not imposable. 4. On the other hand, learned AR opposed the contention of the learned Counsel and submitted that as per order dated 24.9.2001, the appellants were restrained from utilising their credit payment of duty and also was required to p .....

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n the appellants. 5. Heard the parties and considered the submissions. 6. On careful consideration of the submissions made by both sides, we find that vide order dated 24.9.2001 in terms of Rule 8 of Central Excise Rules, 2001 the facility for fortnightly payment of duty and payment of duty for a period of two months or till the deposit of defaulted amount which ever was later. We have seen that the appellant has paid whole of the defaulted amount alongwith interest on 17.10.2001. These facts ar .....

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sions of Rule 8(3A) of the Central Excise Rules, 2001 by utilizing the credit account for payment of duty with effect from 18.1.2002, therefore, the demand of ₹ 1,69,38,241/- is not sustainable. Accordingly, the same is set aside and no penalty is imposable on the appellant against this charge. 7. We further we find that after making defaulted payment by 17.10.2001, the appellant first time taken the credit in their PLA without payment of duty on 21.11.2001. The same continued till 13.01.2 .....

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the same, in that circumstance, the issue before us is to be considered for imposition of penalties on the appellants. The sole contention of the appellant is that they were receiving the communication from their head office with regard to the payment of duty through TR-6 challan telephonically wrongly and therefore, they have taken the credit i.e .due to mistake of the concerned official. In that circumstance, the penalty is not imposable. We find that although there may be mistake of the appe .....

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