LEADER ENGG. WORKS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal has been filed by the appellants against the impugned order -in -appeal, vide which Commissioner (Appeals) has confirmed penalty of Rs. 50,000/ - against them for having taken credit in the PLA for clearance of the goods before the encashment of the cheque issued by them in favour of the Chief Accounts Officer.

(2.) The learned Counsel has contended that the cheque was issued by the appellants at the instance of the department who wanted to collect more revenue before the expiry of the financial year and that the appellants had sufficient balance in their Modvat credit from where the duty could be discharged on the clearances. Therefore, the penalty imposed on the appellants be set aside. On the other hand, learned JDR has reiterated the correctness of the impugned order

(3.) I have heard both the sides and gone through the records. Admittedly, on the date when the cheque was issued, the appellants had no balance in the PLA. They in order to clear the goods issued the cheque in the name of the Account Officer, and without waiting the encashment of the cheque, cleared the goods. They, thus, cleared the goods when they had no sufficient money in the PLA to pay the duty on the goods. This device was adopted by them to cover up the clandestine removal of the goods without payment of duty. Their plea that the department insisted for the issuance of the cheque and prevented them from discharging the duty from Modvat credit account, can not be accepted for want of corroboration from any other source. There is nothing on record to suggest that the department issued any order in writing or any officer of the department orally directed them to do so. No one could prevent the appellants legally from discharging the duty from Modvat credit account if it was permissible. The appellants could also easily defer the clearances, if they wanted the duty to pay from the PLA, till the receipt of the intimation regarding the encashment of the cheque, but they did not do so. The fact that the Accounts Officer did not return the cheque to the appellants did not confer any legal right on them, to clear the goods without having sufficient balance in the PLA. Therefore, the impugned order passed by the Commissioner (Appeals) confirming penalty on the appellants for contravention of Rules 9(1), 52, 173F is legally correct.