DCW LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) STAY application. By this application the applicants have pleaded for dispensation of pre -deposit of penalty of Rs. 2.00 lakhs levied on them under Rule 173Q of the Central Excise Rules, 1944 and a further penalty of Rs. 32,000/ - under Rule 226 of the said Rules. Penalties have been levied for violations of the rules as the applicants have taken MODVAT Credit in this case before the goods were received in the applicants' factory.

(2.) SHRI Raman, the learned Counsel for the applicants/appellants pleaded that the appellants imported the goods i.e. Vinyl Chloride Monomer (VCM) in bulk and after clearance it was stored in their storage tank away from the factory and was brought to their factory in piecemeal and the appellants took MODVAT Credit on the entire quantity imported before the entry of the entire goods into their factory, since they have paid countervailing duty on the goods based on the [recovery] by the Bill of entry. He pleaded that no doubt the appellants were in error in having taken the MODVAT Credit on the entire quantity instead of the actual quantities which were brought to their factory as per rules. However, since there was practical difficulty in unloading the whole quantity of the goods in bulk into the factory they took the MODVAT Credit on the full amount in respect of the goods received since the appellants were eligible to take MODVAT Credit otherwise. He pleaded that in this background no penalty should have been levied and at best the appellants could have been levied penalty of Rs. 2,000/ - for procedural lapses. However, he fairly conceded that the Collector (Appeals) has reduced the penalty by taking note of the interest on the amount that could have accrued and keeping in mind these factors reduced the same to Rs. 2.00 lakhs.

(3.) SHRI Murugandi, the learned DR pleaded that penalty of Rs. 2.00 lakhs as it is very low and need not be reduced further since the procedural violations have been admitted by the appellants.