PODDAR PIGMENTS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal arises for admission.

(2.) After examining the records and hearing both sides, I am of the view that the appeal not only merits to be admitted but also requires to be disposed of instantly. After granting waiver of pre -deposit of the interest and penalty amounts involved in this case, I proceed to deal with the appeal.

(3.) The appellants had taken Modvat credit to the tune of Rs. 5,19,262/ - on High Speed Diesel Oil (input) during the period December, 1997 to March, 1998. As is seen from the copy of the RT -12 return available on record, the department by letter dated 4 -8 -2000 asked the appellants to 'reverse the credit and, accordingly, the appellants reversed the credit on 28 -8 -2000. But, at that time, proceedings pursuant to the show cause notice issued by the jurisdictional Supdt. of Central Excise on 7 -5 -98 was under way. The show cause notice had proposed to recover with interest the amount of duty taken credit of, under the provisions of Rule 57 -I as also to impose a penalty on the party under Rules 57 -I and 173Q. The proposals had been contested by the party in their reply dated 8 -6 -98, wherein they had argued that HSD oil was an eligible input covered by the Modvat Scheme. The dispute was ultimately adjudicated upon by the jurisdictional Assistant Commissioner on 31 -1 -2002. The adjudicating authority confirmed the demand of duty of Rs. 5,19,262/ - against the appellants under Rule 57 -I, demanded interest on the duty and imposed a penalty of Rs. 50,000/ - on them. In the appeal preferred by the party against the order of the original authority, the Commissioner (Appeals) modified the lower authority's order by reducing the penalty to Rs. 5000/ -.