Amforge Industries Ltd. Vs. Commissioner of Central Excise

Amforge Industries Ltd. vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Feb 13, 2004

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Citation: sooperkanoon.com/34153
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: M T K.D.
Decided On: Feb 13, 2004
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Amforge Industries Ltd.

Respondent

Commissioner of Central Excise

Legal References

Reported In: (2004)(176)ELT702Tri(Mum.)bai

Excerpt

.....the impugned order the commissioner imposed a penalty of rs. 3.50 lakhs on the appellants. the ground for imposition of penalty was that the appellants had taken credit of modvat in respect of capital goods even before their installation in their factory. the capital goods were received in the factory of the appellants vide invoice no. 366 dt.24.02.1997 and the credit was rs. 14,15,573/-. the credit was taken vide entry dt. 04.04.1997 to which department claims is, before having installed the said capital goods in the factory. the appellants, admit this position and after the said omission was pointed out to them they immediately reversed the credit, without even waiting for the issue of show cause notice. subsequently the department issued the show cause notice and adjudication order was issued whereby the credit that was reversed, was appropriated and a penalty of rs. 3.50 lakhs was imposed on the appellants in terms of rule 173q(bb) for contravention of the provisions of rule 57q. the appellants are aggrieved by the imposition of penalty. it is pleaded that when the money has been paid even without the issue of show cause notice, imposition of penalty is not warranted. they placed reliance on the judgment of the cegat reported in 2003 (156) elt 753 (tri - chennai) in the case of eid parry (i) ltd. v. commissioner of central excise mumbai.3. i have considered the rival submissions. in this case it is noticed that though the appellants had raised the credit of rs. 14,15,573/-, on 04.04.1997 in their books of account, there is no allegation or evidence on record that they had utilised any part of it for the payment of duty. there was no utilisation of this credit. therefore a mere act of raising the credit in the books of accounts is not such a serious offence, since it has not caused any injury to the revenue.when it was pointed out the appellants promptly debited the said amount. since there is no deliberate intention to evade payment of duty, the imposition.....

Full Judgment

1. The appeal of the appellants is directed against the impugned order in original passed by the Commissioner of Central Excise. Vide the impugned order the Commissioner imposed a penalty of Rs. 3.50 lakhs on the appellants. The ground for imposition of penalty was that the appellants had taken credit of Modvat in respect of capital goods even before their installation in their factory. The capital goods were received in the factory of the appellants vide invoice No. 366 dt.

24.02.1997 and the credit was Rs. 14,15,573/-. The credit was taken vide entry dt. 04.04.1997 to which department claims is, before having installed the said capital goods in the factory. The appellants, admit this position and after the said omission was pointed out to them they immediately reversed the credit, without even waiting for the issue of show cause notice. Subsequently the Department issued the show cause notice and adjudication order was issued whereby the credit that was reversed, was appropriated and a penalty of Rs. 3.50 lakhs was imposed on the appellants in terms of Rule 173Q(bb) for contravention of the provisions of Rule 57Q. The appellants are aggrieved by the imposition of penalty. It is pleaded that when the money has been paid even without the issue of show cause notice, imposition of penalty is not warranted. They placed reliance on the judgment of the CEGAT reported in 2003 (156) ELT 753 (Tri - Chennai) in the case of EID Parry (I) Ltd. v. Commissioner of Central Excise Mumbai.

3. I have considered the rival submissions. In this case it is noticed that though the appellants had raised the credit of Rs. 14,15,573/-, on 04.04.1997 in their books of account, there is no allegation or evidence on record that they had utilised any part of it for the payment of duty. There was no utilisation of this credit. Therefore a mere act of raising the credit in the books of accounts is not such a serious offence, since it has not caused any injury to the revenue.

When it was pointed out the appellants promptly debited the said amount. Since there is no deliberate intention to evade payment of duty, the imposition of penalty by only referring to the fact of raising a credit entry in the book without there being any allegation that but for this credit entry there would not have been a proper duty payment in respect of the goods which have been cleared by using this credit. Consequently I find that the appeal deserves to be allowed.

4. Hence the appeal is allowed and the order of the Commissioner is set aside.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Amforge Industries Ltd. vs Commissioner of Central Excise Same Subject Excise Same Judge M T K.D.

Excise Capital goods In respect of set aside Has been Be all in re