TMI Blog2017 (7) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... to 0.49 mm. also were purchased by respondent no.1. It was, therefore, necessary for respondent no.1 to specifically classify and state the quantity of the tin plates, which were having thickness below 0.24 mm. as well as above 0.24 mm. The petitioner has rightly held that respondent no.1 has deliberately suppressed the said information. If that be so, respondent no.1 cannot be allowed to take benefit of its own wrong and it will have to be held that the tin plates described in Anx.'B2' were of thickness above 0.24 mm. and were not used by respondent no.1 for manufacturing oval tin cans. Penalty - Rule 173Q of the Rules - Held that: - respondent no.1 has obtained MODVAT credit wrongly in the sum of ₹ 14,50,994/plus ₹ 23,87,575/having total of ₹ 38,38,569/. Consequently, in view of this Rule, respondent no.1 was liable to pay penalty as contemplated under this Rule. Petition allowed - decided partly in favor of petitioner. - Writ Petition No. 1662 of 2004 - - - Dated:- 23-6-2017 - T. V. Nalawade And Sangitrao S. Patil, JJ. D.S.Ladda, Advocate for petitioner Mr.P.R.Patil, Advocate for respondent JUDGMENT ( Per Sangitrao S. Patil, J. ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as alleged that the modusoperandi of respondent nos.1 to 4 and their employees was to import the tin plates of thickness of more than 0.24 mm., to send them directly to the job worker for printing, to replace them at job worker's end and to receive back the printed tin plates of lesser thickness than 0.26 mm. 4. The learned Counsel for the petitioner submits that the petitioner issued notice dated 05.09.1998 to the respondents calling upon them to show cause as to why the amount of ₹ 69,66,185/towards availment of inadmissible MODVAT credit, during the period from 199394 to 199498 should not be disallowed and recovered from them under Rule 57I of the Central Excise Rules, 1944 ( the Rules , for short) read with the proviso to Section 11A (1) of the Central Excise Act, 1944 ( the Act , for short) after adjusting the amount of ₹ 4,64,000/, which was already paid by them, with interest under the proviso to Section 11 AB of the Act; and further why penalty should not be imposed upon them under Rules 57I and 209 A of the Rules and Section 11AC of the Act for contravention of the Rules. The learned Counsel submits that after considering the replies filed by the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty on respondent nos.2 to 4. He, therefore, submits that the impugned part of the order of the Tribunal may be set aside and that of the Commissioner, may be restored. 7. On the other hand, the learned Counsel for the respondents submits that the Writ Petition is not maintainable since there was an efficacious alternate remedy available to the petitioner to challenge the order of the Tribunal. He submits that the Tribunal has given specific reasons for setting aside the part of the order passed by the petitioner. The learned Counsel supports the reasons given in the impugned order and prays that the Writ Petition may be dismissed. 8. The learned Counsel for the petitioner submits that he has specifically mentioned in paragraph 10 of the Writ Petition that this High Court has held that the judgment of the Tribunal can be challenged by filing Writ Petition instead of availing circuitous route by making reference at the behest of the department. He has referred to a judgment of the Hon'ble Apex Court in L. Chandrakumar Vs. Union of India and others, (1997)3 SCC 261, wherein it has been held that the judgment of the Tribunal is subject to judicial review under Articles 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me barred nature of the demand made by the petitioner. These findings of the Tribunal have not been challenged by the respondents by filing any proceedings and have attained finality. Therefore, it would not be open for the respondents to challenge the demand made by the petitioner for refund of the MODVAT credit, on the ground that it is beyond the period of limitation. The petitioner has rightly held that the demand of refund of the MODVAT credit wrongly obtained during the period from 199394 to 1997-98, is well within the limitation as contained in the proviso to Section 11A of the Act. 12. The Tribunal confirmed the order passed by the petitioner disallowing the MODVAT credit of ₹ 17,86,655/as described in Anx.'B1'. After giving benefit of ₹ 3,35,660/, being the amount already paid on the invoice while clearing the tin plates, the amount of ₹ 14,50,994/was held to be due and payable from respondent no.1 out of the amount mentioned in Anx.'B1'. This part of the order of the Tribunal has not been challenged by respondent no.1. It has got finality. 13. The petitioner had disallowed the MODVAT claim of ₹ 23,87,575/in respect of the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Containers Pvt. Ltd. and M/s. K.P.Electricals and delivery was effected from M/s.Divecha Glass Company. However, they availed the MODVAT credit on the total quantity received. He further deposed that respondent no.1 has availed and utilised the MODVAT credit on the tin plates which were not used for manufacture of oval tin cans. 16. K.L.Santosh, in his statement recorded on 06.01.1998, deposed that during the years 199495 and 199596, respondent no.1 received some bare tin plates of thickness of more than 0.24 mm., which were not used, but the MODVAT was irregularly availed of in the sum of ₹ 7,69,270/. 17. The abovenamed persons examined by the petitioner disclosed that the necessary record was not maintained and fake record was created in respect of the tin plates of which, MODVAT credit was obtained. 18. As per Rule 173G, it was incumbent on the part of respondent no.1 to maintain accounts of production, manufacture, storage, delivery or disposal of goods including the material received for or consumed in the manufacture of excisable or other goods. The purpose of maintaining the accounts of raw material was obviously for checking of evasion of excise duty. Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner has inflicted penalty of ₹ 50,00,000/under Rule 173Q of the Rules on respondent no.1. As per subrule (1) Clause (bb) of Rule 173Q of the Rules, if any manufacturer, producer or licensee of warehouse takes credit of duty in respect of inputs used in the manufacture of final products wrongly or does not utilise the inputs in the manner provided for in the Rules or utilises the credit of duty in respect thereof in an irregular manner, then all such goods shall be liable to confiscation and the manufacturer, producer or the licensee of the warehouse shall be liable to a penalty not exceeding three times the value of the excisable goods in respect of which, such contravention has been committed or ₹ 5,000/, whichever is greater. 22. As discussed above, respondent no.1 has obtained MODVAT credit wrongly in the sum of ₹ 14,50,994/plus ₹ 23,87,575/having total of ₹ 38,38,569/. Consequently, in view of this Rule, respondent no.1 was liable to pay penalty as contemplated under this Rule. The Tribunal has set aside the order for payment of penalty merely on the ground that in the showcause notice, the petitioner has proposed penalty under the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the end of the jobworker M/s.Divecha Glass Company. We, therefore, do not think it fit to interfere with the order passed by the Tribunal setting aside the order passed by the petitioner directing respondent nos.2 to 4 to pay the penalty. 27. The Writ Petition is liable to be allowed partly. Respondent no.1 will have to be directed to repay the amount of ₹ 38,38,569/towards wrong availment of MODVAT credit with penalty in the equal sum i.e. ₹ 38,38,569/. The amount, if any, repaid by respondent no.1 would liable to be adjusted against the amount that has been directed to be repaid by this order. Respondent no.1 shall repay the said amount within three months from today, failing which it would be liable to pay interest on that amount at the rate of ₹ 10% per annum. 28. In the result, we pass the following order: (i) The Writ Petition is partly allowed. (ii) The impugned order passed by the Tribunal is partly quashed and set aside. (iii) Respondent no.1 shall repay the amount of ₹ 38,38,569/towards the MODVAT credit wrongly availed of plus penalty of ₹ 38,38,569/, i.e. total amount of ₹ 76,77,138/, within a period of three months ..... X X X X Extracts X X X X X X X X Extracts X X X X
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