VARINDER AGRO CHEM. LTD. Vs. CCE CHANDIGARH

JUDGEMENT

(1.) This appeal has been filed by the appellants against the impugned order in appeal dated 29.10.99 passed by the Commissioner (Appeals) affirming the order in original dated 18.3.98 of the Deputy Commissioner who disallowed the modvat credit of Rs. Rs.2,13,749/ - to them and also imposed penalty of the equal amount on them under Rule 173Q of the Central Excise Rules.

(2.) The facts giving rise to this appeal may briefly be stated as under:

(3.) The appellants took modvat credit of Rs.2,13,749/ - in RG.23A/II on the item 'Sulphur' but they did not maintain RG.23A/I Register as required under Rule 57G (3) (a) of the Central Excise Rules. They, however, only maintained From IV Register in which common account for the duty paid and non -duty paid stock of 'sulphur' was kept by them but due to non -maintenance of the prescribed record i.e.RG.23A/I Register it was not possible to verify the receipt of the duty paid 'Sulphur' on which credit was taken by the appellants. The appellants were also found clearing Sulphuric Acid i.e. final product, for manufacture of which 'Sulphur' was their input, on payment of duty as well as without payment of duty for capital consumption for the manufacture of super phosphate fertiliser. They were entitled to take credit only on the duty paid 'Sulphur' proportionately used in the manufacture of sulphuric acid cleared on payment of duty. No credit could be taken by them on the 'sulphur' used for the manufacture of super phosphate fertilizer being exempt from duty. The Deputy Commissioner who adjudicated the case, disallowed the modvat credit of the amount in question to the appellants and also imposed penalty on them under Rule 173 -Q of the Rules, as detailed above, vide order in original dated 18.3.98.