2006 (10) TMI 365

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....spondent. [Order]. - By the impugned order the Commissioner (Appeals) disposed of two orders in original relating to assessees' Unit 1 & 2 (of M/s Elgi Electric and Industries Ltd.) by confirming the penalties imposed by the original authority under Rule 57-I(4) and Rule 173Q of the Central Excise Rules, 1944, on them. There were two demands covered by two Orders in Original for the period from....

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....for manufacture and clearance of spares. In the impugned order the lower appellate authority has not accepted the arguments of the appellants that they had not contravened the provisions of Rule 57-I(2) in using inputs for repairs for defective machines returned to the factories. According to him, availment of credit was ab initio inadmissible as the inputs were used for repair of defective goods ....

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....Q provides for imposition of penalty for wrong availment of credit in violation of Rule 57-I. Therefore, penalty imposed have to be sustained. 3. On consideration of the submissions made by both sides I observe that Rule 57-I(4) deals with imposition of penalty in cases where credit of duty was taken wrongly by reason of fraud, collusion or willful mis-statement etc. In the instant case it i....