SIPANI AUTOMOBILES Vs. COMMISSIONER OF C. EX., BANGALORE

JUDGEMENT

(1.) APPELLANTS are manufacturers of Cars. They were importing car kits from U.K. as car components. Customs viewed that as cars and the department allowed clearance of imported car kits accordingly. Appellant entered into a contract for manufacture of Rover cars with its manufacturer in U.K. They got all the parts of the car imported. With those parts, they manufactured new cars and sold them in India. Customs duty (CVD) on the parts of the car so imported was taken as Modvat credit from time to time. While, so, show cause notice No. V/87/15/94/94 -C -I, dated 17 -10 -1994 was issued asking them to explain (i) why the amount of Modvat credit wrongly availed by them during the period from April 94 to August 94 as detailed in Para 1 above should not be disallowed to them and why the amount equivalent to the Modvat credit wrongly availed by them should not be recovered from them under Rule 57 -I of Central Excise Rules, 1944 read with Section 11A of Central Excises & Salt Act, 1944; and (ii) why a penalty should not be imposed on them under Rule 173Q(1) of Central Excise Rules, 1944.

(2.) APPELLANT submitted detailed reply to the said notice. Though an opportunity to submit their case in person was offered, they requested the Commissioner to pass final orders on the basis of their written objections. Thereupon, the final order No.11/97, dated 30 -4 -1997 was issued. As per that order, the adjudicating authority disallowed the Modvat credit of Rs. 1,69,87,349.l4 being the credit irregularly availed of during the period from April to August 1994 under Rule 57 -I read with Section 11A of Central Excise Act, 1944. The adjudicating authority further imposed penalty of Rs. 1 Crore on the appellant company under Rule 173Q(1) of Central Excise Rules. Aggrieved by this decision, this appeal has been preferred.

(3.) WE heard learned Counsel representing the appellant and learned Departmental Representative in detail. We perused the documents. Additional documents were made available to us by learned Counsel representing the appellant. We accepted them on record. We are disposing of the appeal for the reasons given herein below .