COOLADE BEVERAGES LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This is a reference under Section 35G(3) of the Central Excise Act by which the following questions have been referred to us for our opinion :

(2.) The assessee is a Company registered under the Indian Companies Act, which manufactures aerated waters of brand name Thumps Up, Limca, Gold Spot, Fanta etc. Modvat credit became admissible on glass bottles for manufacture of aerated waters from July, 1991.

(3.) It was alleged by the department that an Intelligence report indicated that the assessee was selling glass bottles after availing and utilizing Modvat credit. It was also alleged that after the scrutiny of the records submitted by the assessee also revealed that the glass bottles were sold on higher rate as compared to the purchase rate, which indicated that the glass bottles sold, were in good condition and were of usable nature. It was further alleged that neither the duty was paid nor Modvat credit was reversed on clearance of these motivated glass bottles. A show cause notice was issued to the assessee to explain as to why duty be not demanded on the glass bottles sold. The Commissioner demanded duty of Rs. 19,54,994.00 under Rule 9(2), read with Section 11A of the Central Excise Act from the assessee. He also imposed a penalty of Rs. 19,61,566/under Rules 9(2) 52A, 173Q and 226. He also imposed a penalty of Rs. 3 lacs on Shri Ashish Sethi, Director of the Company. Aggrieved the assessee filed an appeal before the Tribunal, which was allowed by order, dated 6-10-98. True copy of the order of the Tribunal dated 6-10-98 [1999 (110) E.L.T. 862 (Tri.)] is Annexure-6 to the paper book. Paragraph 11 of that order states :