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of <h1>Tribunal Overturns Commissioner's Order, Invalidating Duty Recovery and Penalties u/r 57CC.</h1> <h3>WHEEL & AXLE PLANT Versus COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II</h3> WHEEL & AXLE PLANT Versus COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II - 2003 (161) E.L.T. 843 (Tri. - Bang.) Issues involved: Determination of assessable value, recovery of differential duty, imposition of penalties, and charging of interest under Central Excise Act, 1944.Assessable value determination: The appellant, a production unit under the Ministry of Railways, was set up to manufacture goods for supply to Indian Railways and private parties. The appellant availed Modvat facility for supplies to private parties, while goods supplied to Indian Railways were exempted from duty. The audit revealed defects, leading to a Show Cause Notice questioning the assessable value determination for goods supplied to Indian Railways. The Commissioner re-determined the assessable value, leading to differential duty demands and penalties.Recovery of differential duty: The Commissioner confirmed demands for differential duty based on under-valuation allegations. However, the Tribunal found that Rule 57CC prescribed reversal of 'an amount,' not Modvat credit or duty. As there was no machinery provision for such reversal, the Tribunal held that the recoveries ordered under Rule 57-I or Sec. 11A could not be upheld.Imposition of penalties: The Commissioner imposed penalties equivalent to the evaded duty under Rule 57-I(iv) read with Sec. 11AC, which the Tribunal found could not be upheld as the rules and sections relied upon covered only input credit and duty, not 'an amount' under Rule 57CC. Similarly, penalties under Rule 173Q were deemed inapplicable to the reversal of 'an amount' under Rule 57CC.Charging of interest: The Tribunal determined that interest under Rule 57-I(v) read with Sec. 11AB could only be imposed in case of duty and credit, not for 'an amount' as required under Rule 57CC. Therefore, the interest as ordered by the Commissioner was deemed unsustainable.In conclusion, the Tribunal set aside the Commissioner's order, allowing the appeals with consequential relief as per law.
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