2004 (1) TMI 541

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....e, in terms of which the Commissioner has : (i)         Demanded a sum of Rs. 2,49,55,313/- under Rule 57-I of the Central Excise Rules, 1944 allegedly representing Modvat credit irregularly taken; (ii)       Imposed a penalty of Rs. 1,79,41,162/- under Rule 57-I(4) of the Central Excise Rules, 1944; (iii)      Imposed a penalty of Rs. 80 lakhs on the Company under Rule 173Q of the Central Excise Rules, 1944; (iv)      Imposed a penalty of Rs. 5 lakhs each on Shri B. Nagi Reddy, Director - Operations and Shri. K. Rami Reddy, General Manager, under Rule 209A of the Central Excise Rules, 1944. (b) During ....

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....hennai and Commissioner of Customs (Port), Chennai respectively, proposing to demand the amounts representing the Customs Duty from the appellants all over again, in spite of the fact that the appellants had sent all the amounts in question through demand drafts in favour of the Commissioner of Customs. (c) As a sequel to the above proceedings, the present SCN dated 28-3-2000 was issued to the appellants proposing to deny Modvat credit of 74 Bills of Entry received by the appellants during the period 2-4-1995 and 30-8-1999. (d) The Commissioner of Central Excise, after accepting that the proceedings under the Customs Excise Act for disallowing the credit and the recovery of duty under Customs Act initiated by Chennai Customs....

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....Chennai. Then the present proceedings under the Central Excise Act cannot be sustained. (b)        There can be no intention on the part of the appellants who have availed the credit of C. V. duty when the Company has sent the required amounts including the amounts of Basic Customs duties by demand draft addressed to Commissioner of Customs, Chennai. They which have been found to have been credited in the Government Treasury as Revenue. Rule 173Q(1)(bb) mandates that "only if credit is taken which a manufacturer knows or which he has reasons to believe was not permissible under the rules" then only penalty could be imposed. Since no material has been found, to implicate the Company and its Directors Shr....