BHIWANI TEXTILE MILLS Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) This appeal has been preferred against the impugned order -in -original dated 29 -1 -2002 passed by the Commissioner of Central Excise vide which he had confirmed the recovery/reversal of the Modvat credit of Rs. 33,68,240/ - under Rule 57 -I of the erstwhile Central Excise Rules and imposed penalty of equal amount under Section 11AC read with Rule 173 -Q, and demanded interest thereon on account of inadmissible Modvat credit availed by them, during the disputed period from June, 1999 to December, 1999.

(2.) The learned counsel has not contested the validity of the impugned order to the extent of disallowing the Modvat credit of the disputed amount under Rule 57 -I of the erstwhile Central Excise Rules, to the appellants. The appellants even had already debited that amount vide RG23 -A, Part -II, entry No. 2331, dated 27 -1 -2000.

(3.) The learned counsel has only questioned the legal propriety of the imposition of penalty equal to the Modvat credit amount, under Section 11AC and demand of interest thereon under Section 11AB of the Act on the ground that provisions of both these sections are not attracted as the Modvat credit amount cannot be treated as duty, which the appellants failed to pay or which was short levied or non -levied on them, initially. He has, however, submitted that penalty could be imposed for wrong availment of the Modvat credit, under Rule 173Q or Rule 57 -1(4) of the Rules, but the same had not been invoked in the show cause notice. Therefore, the penalty as well as the interest demanded from the appellants under the said sections deserves to be set aside.