CADILA PHARMACEUTICAL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) By this appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as "the Act"), the appellant assessee has challenged the order dated 4th August, 2006 passed by the Customs, Excise and Service Tax Appellate Tribunal, Mumbai (hereinafter referred to as "the Tribunal") in Appeals No. E/568/2006 and E/569/2006.

(2.) By an order dated 10th July, 2007, this appeal had been admitted on the following substantial question of law:-

(3.) The facts stated briefly are that the appellant assessee is engaged in the manufacture of pharmaceutical products falling under Chapter XXX of the First Schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as "the CETA, 1985") and was availing of the benefit of Cenvat facility as prescribed under the erstwhile Central Excise Rules, 1944 (hereinafter referred to as "the rules"). It appears that the internal audit party of the Department while conducting audit of the assessee for the period 10th March, 2004 to 6th May, 2004, found that the assessee had irregularly availed capital goods Modvat credit on the goods namely, Laminated False Ceiling and Panels falling under Chapter Heading 4409.00 of the CETA, 1985; Steel Door with Frame falling under Chapter Heading 7308.90; Parts of Furniture falling under Chapter Heading No. 9403.00; Steelage Racking System falling under Chapter Heading 7308.90 and Light Fitting falling under Chapter Heading 9405.90 of the CETA, 1985 during the period of December, 1999 amounting to Rs. 10,54,934/-. Pursuant thereto, a show cause notice came to be issued to the respondent assessee calling upon it to show cause as to why Modvat credit of capital goods amounting to Rs. 10,27,526/- irregularly availed by it should be disallowed or recovered from it under the provisions of Section 11A(1) of the Act read with Rule 57U of the erstwhile rules (now Rule 12 of Cenvat Credit Rules, 2002), interest at appropriate rates specified under Section 11AB of the Act on the aforementioned amount should be recovered and penalty should be imposed under Section 11AC of the Act read with Rule 173Q(bb) of the rules (now Rule 25 of the Central Excise Rules, 2002) and Rule 13 of Cenvat Credit Rules, 2002 for violation of the above referred rules.