Commissioner of Customs and Central Vs. Lans Metals Pvt. Ltd. - Court Judgment

Excerpt:
1. the show cause notice dated 28/02/96 proposed penalty on the assessee on the ground that they had wrongly utilised modvat credit. no reversal of the credit was however sought. the assistant commissioner imposed a penalty, which was set aside by the commissioner. the revenue is in appeal against this order.2. the penalty provisions are normally invoked in addition to reversal of credit wrongly taken or duty short levied. nothing in the proceeding shows that duty was demanded or was in fact paid earlier by the assessee. in that situation, the commissioner was justified in setting aside the orders of penalty. in the appeal memorandum, thee is no explanation why the peculiar procedure was adopted.

Judgment:
1. The show cause notice dated 28/02/96 proposed penalty on the assessee on the ground that they had wrongly utilised modvat credit. No reversal of the credit was however sought. The Assistant Commissioner imposed a penalty, which was set aside by the Commissioner. The revenue is in appeal against this order.

2. The penalty provisions are normally invoked in addition to reversal of credit wrongly taken or duty short levied. Nothing in the proceeding shows that duty was demanded or was in fact paid earlier by the assessee. In that situation, the Commissioner was justified in setting aside the orders of penalty. In the appeal memorandum, thee is no explanation why the peculiar procedure was adopted.