SHRIRAM KAIYAUN MACHINE Vs. CCE, NEW DELHI

JUDGEMENT

(1.) Examined the records and heard both sides.

(2.) Ld. Advocate Shri Gopal Prasad for the applicants reiterates the grounds of the appeal as well as well as those of the present application and submits that the lower appellate authority has allowed the Modvat credit in question by condoning the delay of sixteen days involved int he filing of declaration under Rule 57G of the Central Excise Rules, but that authority upheld the penalty of Rs.50,000.00 imposed by the adjudicating authority. Ld. Advocate submits that once the Modvat credit is allowed by condoning the delay of declaration under Rule 57G, there is no question of contravention of the said Rule and, therefore, there is no warrant for imposition of any penalty under Rule 173Q(1)(bb) of the Central Excise Rules. He, therefore, pleads strong prima facie case for the applicants in the present appeal and prays for complete waiver of pre -deposit of the penalty amount and stay of recovery thereof. Ld. SDR Shri M.D.Singh, on the other hand, submits that there is nothing in the impugned order to indicate that the delay of declaration under Rule 57G was condoned. He submits that, in a case where Modvat declaration was filed belatedly and the delay was not condoned, a contravention of the provisions of Rule 57G was involved and the same would warrant imposition of penalty under Rule 173Q(1) (bb). He, therefore, opposes the present application.

(3.) On a careful consideration of the submissions, I have found a strong prima facie case in favour of the applicants. The only ground on which the adjudicating authority had disallowed the Modvat credit was that there was no Modvat declaration at the time of availment of credit by the assessees. There was no other reason for disallowing the Modvat credit. The lower appellate authority allowed the credit, which implied that the authority condoned the delay of declaration under Rule 57G. Even after having done so, the Commissioner (Appeals) chose to look into the question whether there was any contravention of Rule 57G on the part of the assessees. There was no allegation of contravention of any other provision of law, against the assessee. In this view of the matter, prima facie, penalty was not liable to be imposed on the assessees under Rule 173Q.