TELCO & ORS. Vs. CCE

JUDGEMENT

(1.) THESE ten appeals consist of two sets. One set comprising Appeal Nos. E -284/97 to 288/97 from M/s. TELCO and four of its employees, is against an Order No. 14/COMMR/97 dated 15.7.1997 vide which the duty of Rs. 27,40,67,190.06 has been confirmed against the manufacturer and a penalty of Rs. 25.00 crores has been imposed on M/s. TELCO. Apart from confirming the above demand and imposing the above penalty, respective penalties of Rs. 50,000.00 on Mr. S.M. Khorana, Sr. General Manager, Rs. 40,000.00 on Mr. R.S. Thakur, Dy. General Manager (Planning), Rs. 30,000.00 on Mr. C.G. Verghese, Divisional Manager (Finance) and Rs. 20,000.00 on Mr. P.K. Ray, Sr. Manager (Finance), have been imposed by the Commissioner, in terms of the provisions of Rule 209A of the Central Excise Rules, 1944. The second set consists of Appeal Nos. E -289/97 to 293/97 which are against another Order of the Commissioner being Order No. 15/COMMR/97 dated 17.7.1997 vide which the duty of Rs. 2,77,81,048.00 has been confirmed and a penalty of Rs. 2.00 crores has been imposed on M/s. TELCO under Rule 173Q of Central Excise Rules 1944. Apart from this, penalties of Rs. 50,000.00, Rs. 40,000.00, 30,000.00 and 20,000.00 have been imposed on Mr. S.M. Khorana, Mr. R.S. Thakur, Mr. C.G. Verghese and Mr. P.K. Ray, respectively, by the Commissioner in terms of Rule 209A of the Central Excise Rules, 1944.

(2.) BRIEFLY stated the facts of the case are as under:

(3.) COUNTERING the arguments, Shri A.K. Mitra, Additional Solicitor General assisted by Shri B. Mukherjee and Shri P.K. Dutta, Advocates for the Revenue, submitted that Modvat Rules are operational and if one wants to take the benefit of the same, they have to follow the procedure envisaged under the Rules. The Rules contained the terms and conditions for availing the Modvat Credit and if the assessee is not adhering to the same, the substantive benefit cannot be allowed to them. Credit on the inputs can be used only by payment of duty on the declared final product and if the appellants have failed to declare the parts and accessories as one of their final products, Modvat Credit cannot be allowed to them.