2006 (9) TMI 367

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.... Shri S.L. Meena, SDR, for the Respondent. [Order]. -  This appeal is filed against the order in appeal dated 16-7-2004 which upheld the order in original and sustained the confirmation of duty and penalty on the appellant. 2. The relevant fact that arise for consideration are the appellants are availing Modvat credit on the inputs i.e. transformer oil in their factory. The appe....

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....y) and imposed equivalent amount of penalty under Section 11AC. Hence this appeal. 3. he learned consultant appearing for the appellants submits that, the appellant is not disputing that they are liable to pay the amount of duty on the transformer oil used for repairing of transformer. His contention is against the penalty that has been imposed on the appellant. It is his submission that t....

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....ing the transformers of the State Electricity Boards and other Government agencies and clearing the same without payment of duty. The cardinal principal for availment of Modvat credit on any inputs is that the input should have been used on any relation to the final product on which the appropriate duty is paid. It is very evident from the records that the appellant had not paid any duty on the tr....

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.... assessee. Respectfully following the said judgement, I find that the penalty imposed on the appellant under Rule 173Q is liable to be set aside and I do so. 7. As regard, the penalty imposed on the penalty under provisions of Section 11AC, I find that the provisions of Section 11AC has been invoked against the appellant on the ground that they had suppressed the facts of use of modvatted ....