Customs, Excise and Gold Tribunal - Delhi
Friends Wire Industries vs Collector Of Central Excise on 28 October, 1996
Equivalent citations: 1997(93)ELT232(TRI-DEL)
ORDER K. Sankararaman, Member (T)
1. The rectification application filed under Section 35C(2) of the Central Excises Act, 1944 by the applicants seeks a finding from the Bench in regard to the imposition of penalty in terms of the order passed by the Additional Collector of Central Excise, Chandigarh. When the appeal had come up for decision before the Tribunal, a finding was given regarding the Modvat credit which had been disallowed by the lower authorities. Though this was sustained in the order of the Bench, an observation was given therein that once the erroneous payment of duty by debit to RG 23A Part n account is regularised by payment of duty from PLA, the original debit to RG 23A Part II account would stand restored to that account and would be available for being utilised by the applicants/appellants for payment of duty on their declared final products. While recording this order the plea made in the appeal for setting aside of the penalty was not considered and no finding was given. The present rectification seeks to have the said omission made good.
2. We have heard Shri K.K. Anand, learned counsel for the appellants/applicants. He submits that in view of the finding on merits given by the Tribunal in their order, the penalty should be set aside.
3. Shri D.S. Negi, learned SDR replying to the submissions made by the learned counsel also referred to the order of the Bench which had upheld the impugned order on merits with regard to erroneous utilisation of the Modvat credit for non declared final products and submits that the imposition of penalty was fully justified which deserves to be upheld.
4. We have considered the submissions. We find on a perusal of the record and the subject order that while credit had been correctly taken on the declared and eligible inputs, only the utilisation thereof was adjudged to be erroneous as the final products for which such utilisation took place had not been declared. Thus, while such final products were bare copper wires, they had only declared enamelled copper wire as their final product. The declared inputs were common for both these final products. Though, on a strict interpretation of Rules 57G and 57F the view had been taken that such utilisation of credit was erroneous, the nature of irregularity is not serious. The applicants did not derive any advantage, otherwise not due to them, as the subject credit if not utilised by them for payment of duty on the final products in question would have been available to them for being utilised for payment of duty on their other final product which had been declared. The two final products are also akin to each other in some respects and not too different. The wrong utilisation of credit had also been rectified by fresh payment of duty from their PLA. In the circumstances, the imposition of penalty deserves to be set aside. We order accordingly. The rectification is allowed.