Customs, Excise and Gold Tribunal - Bangalore
Bharat Heavy Electricals Ltd. vs Commissioner Of C. Ex., Chennai on 31 January, 2002
Equivalent citations: 2002(141)ELT829(TRI-BANG)
JUDGMENT G.A. Brahma Deva, Member (J)
1. This is an appeal filed by the appellants, M/s. Bharat Heavy Electricals Ltd., Hyderabad.
2. Shri M. S. Rajappa, Consultant appearing for the appellants submitted that the party has filed this appeal with reference to imposition of penalty. He said that the penalty has been imposed on the ground that an alleged misuse of Modvat credit on account of inputs having been issued to Civil Works, Transport Department Canteen, HRB Centre, Fire Services, etc. He said that the penalty of Rs. 23,45,462/-(Rupees Twenty three lakhs forty five thousand four hundred sixty two only) was imposed in this case. He said that the relevant Section 11AC of Central Excise Rules, 1944 has come into force with effect from 28-9-96. The Counsel also referred to the decision of the Tribunal in the case of Bharat Petroleum Corporation Ltd. v. Commissioner of C. Excise, Mumbai-II reported in 2002 (139) E.L.T. 382 (Tri. - Mumbai). He said that in the similar circumstances, the penalty has been reduced to Rs. 10 lakhs from Rs. 2.07 crores under erstwhile Rule 173Q of Central Excise Rules, 1944 and Rs. 1.17 crores under Section 11AC of Central Excise Act, 1944.
3. On the other hand, Shri Narasimha Murthy, JDR appearing for the Revenue submitted that the penalty in the instant case was not imposed in terms of Section 11AC of Central Excise Rules, 1944 in the respective order. The penalty was imposed under Rules 57-1(4) and 57U(6) of the Central Excise Rules, 1944 taking into account the duty element from 1996-97 onwards.
4. We have carefully considered the matter. The issue relates to imposition of penalty on the ground that the party has misused the Modvat credit. It was fairly conceded by the party that there was a mistake on their part in availing the Modvat credit and same has been reversed. In the facts and circumstances of the case, we are of the view that a lenient view has to be taken with reference to quantum of penalty. In the similar circumstances in the case of Bharat Petroleum Corporation Ltd. (supra), penalty has been reduced to Rs. 10 lakhs as against Rs. 2 crores. In line with that order and in the facts and circumstances of the case, penalty is reduced to Rs. 10 lakhs. Except this modification, the impugned order is otherwise upheld. Ordered accordingly.