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2002 (4) TMI 164

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..... y had shown shortages of raw materials/components in the balance sheets to the tune of Rs. 13,36,134/- and had written off of this amount from their books of accounts. These shortages, however, were neither accounted for in the Central Excise Registers nor the proportionate amount of Modvat credit had been expunged from the Modvat credit records. These facts were also not intimated to the department. It therefore appeared to the departmental authorities that the assessees had availed Modvat credit on raw materials/components which were found short and were not utilised in the manner specified under the Modvat Rules and suppressed this fact from the department. Accordingly, the Joint Commissioner (Preventive) of Central Excise Commissionerat .....

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..... suppression and submitted that they have been filing the balance sheets every year to the department and therefore the larger period of limitation cannot be invoked in their case. They also contended that there was no deliberate and wilful violation of the provisions of the concerned rules. Therefore, there was no warrant to impose penalty on them. The Joint Commissioner of Central Excise (Preventive), however, vide his order dt. 27-12-99 confirmed the duty of Rs. 1,95,588/- on the appellants under Rule 57-I(1)(ii) and 57-I(1)(iii) read with the proviso to Section 11A(1) of the Central Excise Act, 1944. He further imposed penalty of Rs. 1,37,168/- on the party under Rule 57-I(4) and a penalty of Rs. 5,000/- under Rule 173Q. He also ordered .....

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..... re about 1000 small components; that these were stored in bins and some of them may have got slightly mixed during the course of the manufacture in itself is not a defence against not expunging the credit of duty availed on such raw materials/components. The normal and natural course of action expected on the part of the appellants as per law is that the moment they had ascertained the shortage of the raw materials/components, they should have debited the quantity and the corresponding credit of duty in the Part I and Part II of their RG 23A account. Having not done that, they have clearly violated the provisions of Rules 57A and 57F(1). It is rightly observed by the lower appellate authority in his order that there is no provision under th .....

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