2001 (10) TMI 427

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....xena, JDR, for the Respondent. [Order]. - The facts of the case are, briefly, as under :- The appellants, manufacturers of Aluminium and articles thereof falling under Chapter 76 of the Schedule to the Central Excise Tariff Act, had cleared on payment of duty certain quantity of wire rods to their customers, but the latter found the goods to be defective and hence returned the same to the....

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....msp;Ld. Counsel, Shri A.C. Jain for the appellants has particularly relied on the decision of the Larger Bench of the Tribunal in the case of Hindalco Industries Ltd. v. CCE, Allahabad [2000 (119) E.L.T. 711 (Tribunal - LB)], wherein it was held, in a case involving similar set of facts, that Aluminium Wire Rods returned as defective by the manufacturer's customer were eligible inputs for Modvat c....

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....s no question of irregular availment of the credit and consequently no question of imposition of penalty under Rule 173Q. He has particularly pointed out that the adjudicating authority imposed penalty as a measure of regularisation of deficiencies in invoices and not by way of penalization. According to the Counsel, Rule 173Q does not provide for any penalty in the nature of regularisation of def....

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....n was rightly taken by the appellants on the Aluminium Wire Rods. As regards the penalty, I find that there was no justification for the same inasmuch as the Commissioner himself had found that the assessee was under a bona fide belief that the invoices on the strength of which the credit was availed were valid documents for Modvat purposes. He also found that the deficiencies in the invoices were....