Judgment:
1. The appellants availed the modvat credit totally amounting to Rs. 3,09,108.75. The proceedings were initiated against them by the Assistant Collector, Central Excise, Gwalior vide show cause notice dated 14/15-12-1994 alleging that the stated amount of modvat credit was not available to them on the grounds that they had not intimated to the Range Superintendent regarding the receipt of the goods in their factory in terms of the provisions of Sub-rule (2) of rule 57T of Central Excise Rules, 1944. It is also alleged that the Bill of entry dated 15-10-1993 on which modvat credit of Rs. 1,50,257.70/- had been taken, was not in favour of the party as it was in favour of M/s Jamuna Auto Ind. Ltd., Nehru Place, New Delhi whereas the credit has been availed by M/s Jamuna Auto Ind. Ltd., Malanpur and no declaration/certificate was given on Bill of entry that the goods will be used for the manufacture of excisable goods at the latter's premises. Another amount of Rs. 1125 has been disallowed on the grounds that the modvat credit on the inputs is taken under the invoice which is not duplicate for transporter but it is original copy.
2. The Additional Commissioner of Central Excise, Bhopal vide his Order-in-Original dated 7-5-1997 confirmed the demand against the appellants and also imposed a penalty of Rs. 50,000/- on them.
3. On appeal by the party, the Commissioner (Appeals), Bhopal vide his Order dated 6-1-1998, rejected the appeal.
4. I have heard Shri P.N. Kaul, Advocate for the appellants and Shri Sanjeev Srivastava, JDR for the Revenue. I have carefully considered the submissions made before me. The ld. Advocate of the appellants has contested the findings of the lower authority that the intimation regarding the receipt of the capital goods was not given to the Department. In this regard he referred to the letter of intimation dated 19-11-1994 addressed to the Superintendent, Central Excise Range Malanpur by the appellants which reads as follows: "Please find enclosed herewith details of capital goods, on which we availed modvat credit as on 11-11-94 under Central Excise Rule 57Q".
The original authority has taken note of the receipt of above stated intimation in his order. He has, however, observed that as per rule 57T (2), a manufacturer intending to take credit of the duty paid on the capital goods under Rule 57Q shall intimate the particulars regarding full description of the capital goods alongwith brand name and identification marks and numbers if any; particulars of the gate pass or bill of entry, as the case may be and any other particulars as the Collector may require, on receipt of such capital goods. It is stated that the Collector, Central Excise had issued Trade Notice No. 63/94-CE, dated 2-8-1994 prescribing the format of intimation.
The Original Authority has observed that the intimation dated 19-11-1994 does not show the date of receipt of the capital goods in the factory which is the most important information in case of such goods. The ld. DR has drawn my attention to Annexure 'A' to the show cause notice dated 14/15-12-1994 wherein it is stated that the modvat credit of Rs. 1,50,257.70 taken on 11-7-1994 relates to the bill of entry dated 15-10-1993. Similarly the modvat credit amounting to Rs. 1,54,079.90 is taken on 18-6-1994 and it relates to the bill of entry No. 79 dated 15-6-1992. These facts are not in dispute. No explanation is forthcoming from the appellants as to how the modvat credit relating to bill of entry dated 15-10-1993 is taken on 11-7-1994 after lapse of a period of about nine months. In the second case also the modvat credit is taken after two years of the date of the bill of entry. I, therefore, tend to agree with the view held in the order-in-original that the date of the receipt of capital goods in the factory is the most important information and the same is not forthcoming in the intimation letter dated 19-11-1994 (Supra) . The assessee has only intimated the date of taking the credit but not the date on which the capital goods were received in their factory. Therefore, the credit on the capital goods is taken in violation of the provisions of the rule 57T(2) read with the Trade Notice issued by the Collector in this regard.
5. As regards the findings that the bills of entry were not in favour of the assessees, it is stated that they were in favour of the Hqrs.
Office of the party but the goods were received directly in the factory and installed therein. This type of situation is covered by the instructions in the Board's circular No. 179/13-95-CX-8, dated 29-2-1996 which advises that the credit should not be denied where the Bill of entry is in the name of Head Office provided that the entire consignment covered by the said bill of entry is received in the factory in original packing. Further, the credit amounting to Rs. 1,125/- is denied on the grounds that the invoices were not "duplicate from transport". It is stated that the credit has been taken on the strength of the original copies of invoices. This inference is arrived at only the ground that both the original and duplicate copies are written in ink whereas a duplicate copy or invoice is always a carbon copy. I think this finding is only a conjecture on the part of the adjudicating authority. I find no reason to deny the Modvat credit to the appellants on this ground.
6. The appellants are also subject to a penalty of Rs. 50,000/- under Rule 173Q. The penalty is imposed on them for having knowingly deprived the Govt. of its due exchequer for a considerable time by contravening the Rule 57G . This does not appear to be one of the grounds under rule 173Q for which a party could be subject to penalty. In any case the appellants are also subject to interest as per the rules by the Additional Commissioner. Therefore, there is no penalty sustainable against the appellants and the same is accordingly set aside.
7. In fine, the appeal of the party in respect of the modvat credit totally amounting to Rs. 3,07,983.75 fails and the same is accordingly rejected. The appeal relating to the modvat credit of Rs. 1,1257- succeeds and the same is allowed. The penalty imposed is set aside.