MS INDRA MARSHAL OIL ENGINES Vs. CCE BHOPAL

JUDGEMENT

(1.) W .E.F. 1.4.94 the Central Excise department introduced the mode of payment of duty by the assessees on the invoices instead of Gate Passes being followed before that date. Correspondingly the assessees could also avail modvat credit under "Rule 57A read with Rule 57G on the Strength of the duty paid by the manufacturers on the invoices issued by them.

(2.) THE appellants M/s Indra Marshal oil Engines, Indore manufactured IC Engines falling under chapter 84. They were also availing modvat credit under Rule 57A. It was observed that they had availed modvat credit totally amounting to Rs. 1,17,609.45 on the strength of 3 Nos GPs issued on 4.5.94, 16.5.94 and 25.5.94 By M/s Laxmi Industries, Jullunder. They were accordingly issued show cause notice dt. 8.11.94 in which it was alleged that the GP is on the strength of which they had availed the modvat credit could not be treated as valid documents for the purpose of availing credit under Rule 57G(2) since the Gate Pass system under Rule 52 A was dispensed with and it was switched over to the invoice system. They were therefore, called upon to show cause why the modvat credit of the aforesaid amount should not be recovered form them under Rule 57I read with Section 11 A of the Central Excise Act, 1944 and why penalty should not be imposed on them under Rule 173Q.

(3.) THE above proceedings culminated in the Additional Commissioner, Central Excise, Bhopal passing an Order dt. 30.1.97 in which he disallowed the modvat credit of the aforesaid amount to the appellants apart from imposing the penalty of Rs. 10,000/ - on them.