Customs, Excise and Gold Tribunal - Calcutta
M/S. Kanchan Oil Industries Ltd. vs C.C.E., Calcutta-Ii on 30 May, 2001
ORDER
Archana Wadhwa
1. The appellants are manufacturer of Vegetable Products which became exempted vide Notification No.16/96-CX dated 23.7.96. The appellants were, prior to the said date, availing the benefit of Modvat credit in respect of various inputs and were utilising the same on payment of duty on the final product. When the final product became exempt, they were issued Show-cause Notice on 24.2.97 proposing to deny modvat credit in respect of the inputs lying in stock as on 23.7.96 as also the inputs used in the manufacture of final product lying in stock on the said date.
2. The said Show-cause Notice was adjudicated by the Asst. Commr., Central Excise, Calcutta confirming the demand of duty against the appellants by reversing the Modvat credit of Rs.1,58,607.55 (rupees one lac fifty eight thousand six hundred seven and paise fifty five only), as proposed in the Notice and imposing personal penalty of Rs.15,000/- (rupees fifteen thousand only) under Rule 173Q. Appeal against the above order did not succeed before the Commissioner (Appeals). Hence the present appeal.
3. I have heard Shri B.N. Chattopadhdya, learned Consultant appeaing for the appellants who fairly concedes that the issue has since been decided against them by the Larger Bench decision of the Tribunal in the case of Khanbhai Essoofbhai & Others reported in 1999 (30) RLT 519 (CEGAT-LB). He further submits that the Hon'ble Supreme Court in the case of Eicher Motor Limited vs. UOI reported in 1999 (106) ELT 3 (SC) has held that right accrued to a assessees as regards availability of scheme must take place in accordance with scheme and the credit lying un-utilised on 16.3.95 by introduction of Rule 57F(4A) of Central Excise Rules, 1944 cannot be allowed to be lapsed inasmuch as the said Rule cannot be applied to the goods manufactured prior to 16.3.95. He also seeks to rely on another decision of the Hon'ble Supreme Court in the case of Dai Ichi Karkaria - 1999 (112) ELT 353 (SC). He prays that in view of the facts and circumstances of the case there was was no justification for imposition of penalty.
4. Shri V.K. Chaturvedi, learned SDR appears for the Revenue.
5. After giving my careful consideration to the submission made by both sides I find that the issue is no more res integra and has been settled in favour of the Revenue by the Larger Bench decision of the Tribunal referred supra. The judgements of the Hon'ble Supreme Court relied upon by the learned Consultant were given in different context. The first judgement was in respect of Rule 57F(4a) introduced w.e.f. 16.3.95 whereas in the instant case the Modvat credit is sought to be denied on the basis of Rule 57C which was already in existence at the time of availing of credit. Similarly, Dai Ichi Karkaria judgement of the Hon'ble Supreme Court is also in altogether different facts and context. In any case the issue as having been decided by the Larger Bench of the Tribunal I do not see any reason to take a different view. I uphold the order of reversal of Modvat credit.
6. However as regards the personal penalty of Rs.15,000/- I find that the issue was not settled at the relevant time and there were different decisions in favour and against the appellants. In these circumstances no mala fide can be attributed to the appellants. Accordingly personal penalty of Rs.15,000/- is set aside. But for the above modification in the order as regards personal penalty, the appeal is otherwise rejected.
(Pronounced in the Court)