Judgment:
1. Vide the impugned order the Commissioner Central Excise, Raipur has confirmed demand of Rs.46,14,072/- against the appellants on the following grounds:-a) Aluminium ferruls are not inputs Rs. 3,683/-in terms of Rule 57Ab) Chromic acid was used in the Rs. 14,600/-manufacture of exempted final productsc) Modvat credit availed on LSHS on Rs.12,31,358.04d) Credit availed on quadruplicate Rs/ 33,67,431/- Apart from confirming the demand of duty he has also imposed a personal penalty of Rs.10 lakhs from the appellants.
3. It is seen that the modvat credit in respect of aluminium ferruls has been denied on the ground that being a part of the machine, the same are hit by the exclusion clause or Rule 57A. However, the Larger Bench of the Tribunal in the case of Union Carbide & Others Vs. CCE, reported in 1996 (86) ELT 613 has held that the explanation to Rule 57A does not cover the parts of a machine. By applying the ratio of the said decision we find that the aluminium ferruls are eligible modvatable items.
4. As regards the Chromic Acid used in the manufacture of refractories, which in turn are used in the manufacture of iron and steel which are being cleared on payment of duty, we find that Rule 57D (2) protects the appellant. The Tribunal in the case of CCE, Meerut Vs. Flex Laminators [2000 (38) RLT 65 (CEGAT)] has held that the credit in respect of the inputs used in the manufacture of exempted intermediate goods which are, in turn, used captively for manufacture of final dutiable product are not to be denied. By following the ratio of the said decision, we hold that the credit was available in respect of Chromic Acid.
5. An amount of Rs.12,31,358.04 has been denied on the ground the same has been claimed by the appellant after a period of six months from the date of issuance of the invoices. Sh. Devnath fairly agrees that the said issue is now finally decided by the Larger Bench in the case of Kusum Ingots & Alloys Ltd. Vs. CCE, Indore reported in 2000 (120) ELT 214 (Tribunal-LB) laying down that credit cannot be taken after a period of six months from the date of issuance of invoice, after the amendment to Rule 57G on 29.6.95. As such he concedes that the said amount is not available to them as modvat credit in view of the law laid down by the Larger Bench. We accordingly confirm the same.
6. Another quantum of Rs.33,67,431/- has been disallowed on the ground that the credit was availed on the basis of quadruplicate copy instead of triplicate copy of the Bill of Entry. The appellants contention is that inadvertently they submitted triplicate copy to RBI. However, they contend that now they have been able to procure the same from Reserve Bank and can present the same to the Excise authorities, if an opportunity is given to that effect. In view what has been stated, we set aside this portion of the impugned order confirming the demand of duty of Rs.33,67,431/- and remand the matter to the original adjudicating authority for de novo decision after taking into consideration triplicate copy of Bill of Entry.
7. As regards personal penalty we find that the appellants have succeeded on three counts. In respect of confirmation of demand of duty to the tune of around 12 lakhs approximately, we note that the issue involved was not free from doubt at the relevant time and the law was only settled subsequently with the passing of judgement by the larger Bench. As such we set aside the imposition of personal penalty of Rs.10 lakhs on the appellants.