REAL PLASTICS Vs. COMMISSIONER OF CENTRAL EXCISE, DAMAN

JUDGEMENT

(1.) AS the appellant had already deposited the duty amount of Rs. 23,957/ -, I dispense with the condition of pre -deposit of penalty and interest and proceed to decide the appeal itself, inasmuch as, a short issue is involved.

(2.) THE dispute relates to availment of Modvat credit in respect of capital goods received by the appellant during the year 2000 -01. The appellant was required to take 50% of the credit in that year and the balance 50% in the next financial year that is as on 1 -4 -2001. As the appellant took the entire credit prior to 1 -4 -2001 and filed return with the Department, no objection was taken. Subsequently, as per audit objection on April, 2004, the above discrepancy was noticed and the appellant was directed to make reverse entries in 2004 and again took credit subsequently. Accordingly, the appellant reversed the credit on 23rd April, 2004 and took credit on the same the very day. Subsequently, proceedings were initiated by way of issuance of show cause notice on 23rd December, 2005 proposing confirmation of interest and imposition of penalty upon them. The said proceeding culminated into an order passed by the Deputy Commissioner vide which he confirmed interest amount of Rs. 18,815/ - and also imposed penalty of Rs. 10,000/ -. The said order of the Deputy Commissioner was appealed against by the assessee as well as by the Revenue for enhancement of penalty. Commissioner (Appeals) vide his impugned order rejected the assessees appeal but allowed the Revenues appeal by enhancing the penalty equivalent to the duty amount. Hence the present appeal.

(3.) THE appellants contention is that though they have availed the entire credit in the very first year itself but only 50% of the credit was utilized and the balance 50% was utilized in the next financial year. As such, it only remained as paper entry in record which should not invite any penal action confirming interest against them. In any case, submits the learned Advocate that they became entitled to avail the balance 50% of the credit as on 1 -4 -2001 and as such, if interest is required to be confirmed it should be till the date of their entitlement to avail credit that is till 1 -4 -2001, in which case, it will come approximately to around Rs. 1300/ -. As such, he submits that the amount being small, he is not contesting the quantum of interest and is ready to pay the same.