GHAZIABAD ORGANICS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) M /s. Ghaziabad Organics Ltd. are challenging the confirmation of demand and imposition of penalty by this Appeal.

(2.) SHRI Bipin Garg, learned Advocate mentioned that the Appellants manufacture excisable goods falling under Chapter 29 of the Schedule to the Central Excise Tariff Act and discharged the duty liability on fortnightly basis under the Central Excise Rules; that the scrutiny of the returns for the period January, 2001 to March, 2001 revealed that they had paid the duty amounting to Rs. 10,30,893/ - from their CENVAT account which was not available on due dates; that accordingly the Deputy Commissioner has confirmed the demand of duty and imposed equivalent amount of penalty which has been upheld by the Commissioner (Appeals) in the impugned order. Learned Advocate submitted that as per the provisions of the Central Excise Rules, the duty for the first fortnight of the month was payable by the 20th and Central Excise duty for the second fortnight of the month was payable by 5th of the following months; that, however, relevant Central Excise Rules provided that the Cenvat credit can be utilised only from the balance as existing on the 15th day of the month and not on 20th of the month; that similarly payment of duty for the second fortnight from Cenvat credit account cannot exceed the balance of the last day of the month; that in the first fortnight of January, 2001, they had paid the duty amounting to Rs. 3,34,840/ - out of Cenvat credit earned after 15th of January, 2001; that they had paid the duty by debiting Cenvat credit wrongly to the following extent in the subsequent fortnights :

(3.) LEARNED Advocate has submitted written submissions in which it has been mentioned that there was a factual mistake in the arguments advanced during the hearing; that the Department has infact calculated the demand of duty for subsequent fortnights after adjusting first overdrawal of Rs. 3,34,840/ - He has, further, submitted that the overdrawal was not made by the Appellants with a mala fide intention and was only due to unawareness of law; that Rule 57AB of the Central Excise Rules, 1944 was amended in August, 2000 by Notification No. 48/2000 -Ccntral Excise (N.T.), dated 18 -8 -2000 by which the restrictions on the use of CENVAT credit was introduced; that it appears that even the Department was not aware of this amendment as the show cause notice was issued only in December, 2001; that the overdrawal was taken by them in the months of January to March, 2001. He, therefore, requested that no penalty is imposable on the Appellants.