MEWAR POLYTEX LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Leave granted.

(2.) The Assessee (Appellant herein) seeks to challenge the judgment of the High Court of Rajasthan at Jodhpur in Central Excise Appeal No. 9 of 2006. By its judgment and order dated 26.8.2008, the High Court dismissed the appeal, affirming the order of the Tribunal dated 4.7.2005, which had allowed the appeal of the Revenue and set aside the order of the Commissioner (Appeals), who in turn had set aside the order in original. By the order in original, the Assistant Commissioner had disallowed the MODVAT credit of Rs. 5,37,799, and confirmed the recovery thereof, and also imposed a penalty of Rs. 50, 000 under Rule 173Q(1)(bb) of the Central Excise Rules, 1944 (for short "the Rules").

(3.) The necessary facts, in brief are, that the show cause notice dated 15.2.1999 was issued to the Assessee alleging that it had wrongly taken credit to the extent of Rs. 5,37,799 under Rule 57A of the Rules, during August 1998. The notice also called upon the Assessee to show cause and explain as to why the aforesaid credit, wrongly taken by the Assessee should not be disallowed/recovered under provisions of Rule 57I, and also why penal action under Rule 173Q (1)(bb) should not be taken, and interest should not be charged under Section 11AB.