WATERBASE LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, GUNTUR

JUDGEMENT

(1.) THESE appeals have been filed against the Order -in -Original No. 3/2004 -Cus. (Commr.), dated 31 -3 -2004, passed by the Commissioner of Customs & Central Excise, Guntur.

(2.) THE appellants are 100% E.O.U. Consequent to the introduction of Cenvat Credit Rules, 2001, the appellants submitted a letter dated 27 -7 -2001 to the Jurisdictional Commissioner of Central Excise expressing their intention to avail Cenvat credit. The letter was acknowledged. The appellants started taking Cenvat credit. They utilised the same towards the payment of duty on domestic clearance. The Revenue issued a show cause notice dated 26 -8 -2002 for disallowing the Cenvat credit in view of the Rule 17 of the Central Excise Rules, 2001 -2002. The Commissioner disallowed the credit and demanded duty to the tune of Rs. 49,48,045/ -. He imposed mandatory penalty. Further he imposed penalty of Rs. 5,00,000/ - on Shri P. Ravi, General Manager of the appellants unit under Rule 26 of the Central Excise Rules, 2001/2002 and also imposed penalty of Rs. 5,00,000/ - on the appellants, M/s. Water Base Ltd. under Rule 13 of the Cenvat Credit Rules, 2001/2002 for irregular availment of credit. The appellants have strongly challenged the findings of the adjudicating authority.

(3.) SHRI S. Murugappan, learned Advocate appeared for the appellants and Shri R.N. Viswanath, learned SDR appeared for the Revenue.