ALPUMP LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS application has been filed by M/s. Alpump Ltd., Chennai, for waiver of predeposit and stay of recovery of Rs. One lakh being penalty imposed on them. After hearing both the parties on the stay application, the requirement of predeposit is waived and the appeal itself is taken up for final disposal.

(2.) M /s. Alpump Ltd., had removed credit availed capital goods and inputs to a job worker in May 2003. On 21.11.05, the appellant paid the credit relatable to the inputs and capital goods removed, on their omission to reverse the credit being pointed out by the departmental officers. After due process of law, the original authority demanded an amount of Rs. 4,23,934/ - and appropriated the said amount already paid. He imposed equal amount of penalty under Section 11AC of the Central Excise Act 44 (the Act) besides demanding the interest due on the short reversed credit belatedly paid. In the impugned order, the Commissioner (Appeals) sustained the order of the original authority but reduced the penalty to Rs. One lakh.

(3.) LD . SDR submits that the penalty imposed by the original authority was reduced by the Commissioner (Appeals) to a fair amount. The penalty deserved to be sustained. He further submits that at the time of the removal of inputs and capital goods, the appellants had no intention to bring back the same as articles such as fan etc., had also been transferred to the job worker's premises to set up a lasting establishment. The Ld. SDR relies on the judgment of the High Court of Punjab and Haryana in CCE, Delhi v. Machino Montel (I) Ltd. reported in , in support of his plea that mere deposit of duty before issue of notice would not necessarily negate the situation mentioned in the said section. In his rejoinder, the Ld. Counsel submits that the materials had been used by an associate of the appellants for job work. The inputs and capital goods were used in the manufacture of final products and the same were used for the intended purpose. He also submits that the capital goods have since been returned. He points out an error in the impugned order wherein the Commissioner had observed that the appellants had paid the interest due.