COMMISSIONER OF CENTRAL EXCISE Vs. STERLITE (INDIA) LTD.

JUDGEMENT

(1.) This is a revenue appeal against the order of the Commissioner (Appeals) setting aside the penalty of Rs. 50,000/ - on the ground that there was no misutilisation of credit and that there was no loss of revenue to the Government or misuse of Modvat benefit which has not been proved by the Department for warranting imposition of penalty. The Commissioner has also noted that the procedure lapse itself has been condoned by the Assistant Commissioner and credit extended. He has noted the judgment of the Mitcon Jyothi as reported in 1998 (104) E.L.T. 744, wherein imposition of penalty for such procedural lapse has been held to be not sustainable. The appeal before the Commissioner was only on the short issue of imposition of penalty.

(2.) The revenue contended that the assessee had taken Modvat credit on 11 -1 -1997. They were in possession of bill of entry, wherein CVD assessed was shown as NIL and copies of receipts towards payment of CVD for Rs. 96,35,017/ -. Mere receipts towards duty payment cannot be regarded as duty paid documents as prescribed under Rule 57G. The assessee had taken credit without valid documents and started utilising the said credit for paying duty on the final product. They had produced the prescribed certificate only subsequently. But for such credit, entire removals during the period would amount to unauthorised removals without sufficient balance in terms of Rule 9(1) and Rule 9(2). The revenue has also relied on the judgment rendered in the case of Reliance Industries Ltd. v. CCE as reported in 1995 (75) E.L.T. 77, wherein utilisation of credit wrongly was held to be liable for punishment by imposition of penalty. Further reference has been made in the case of Standard Surfactants Ltd. v. CCE as reported in 1998 (103) E.L.T. 675, wherein Modvat credit was entered in RG 23A Part II without supporting duty paying documents and in that view of the matter, penal provisions of Rule 173Q was held to be attracted.

(3.) SDR contended that the assessees have taken the benefit of the Modvat credit without support of documents and as it was an irregular utilisation and penalty was imposable.