2007 (2) TMI 550

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....ners, Deep Freezers, Bottle Coolers, Water Coolers, Cooling Coils and Condensers which are all excisable goods. After certain investigations, the Revenue proceeded against the appellants by issue of show cause notice demanding duty and proposing penalties. The Original Authority in his Order dated 31-3-2000 confirmed the duty demand of Rs. 12,85,507/-. He imposed a penalty of Rs. 1,00,000/- on the appellants under Rule 173Q of the Central Excise Rules, 1944. He confiscated the plant and machinery. However he gave an option to redeem the goods on payment of fine of Rs. 25,000/-. He imposed a penalty of Rs. 50,000/- on Shri G. Somasekhara Rao of G.P.A. Holder of the appellants. The appellants appealed to the Commissioner (Appeals). But the Co....

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....e number of compressors (221) used for manufacture of goods cleared under exemption is Rs. 15,33,906/. The Modvat credit on fan motors would be to the extent of Rs. 42,430/-. Thus, the appellants are entitled for total Modvat credit of Rs. 15,76,336/- for the period from 1987-88 to 1991-92. The duty demanded is only Rs. 12,85,507/-. Therefore they could not have evaded payment of duty. (iv)   The lower authorities have denied the Modvat credit on the ground that the same is not admissible when the goods cleared are in a clandestine manner. The lower authorities have also held that the credit balance at the end of the financial year lapses. The Tribunal in the case of C.C.E., Madras v. National Trading Company, 1996 (83) E.L.T. ....

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.... is unsustainable. 4. Shri K. Sambi Reddy, learned JDR pointed out that in respect of clandestine removal, no Modvat credit is admissible. Therefore he vehemently opposed the prayer of the appellants. 5. We have gone through the records of the case carefully. The demand of duty arises on account of certain clandestine removal. The appellant has actually not challenged the issue of demand duty on merits. However their grievance is that the duty calculation has not been properly made in the sense that the benefit of Modvat credit has not been given in spite of the evidence of having received duty paid inputs. We have perused the records. It is seen that the compressors were received from M/s. Kirloskar Brother Ltd., Pune and M....