2008 (6) TMI 461

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....s appealed against by the respondent before the Tribunal, who vide their Order No. 579/ 97-C, dated 29-9-97 confirmed the demand of duty, but reduced the penalty from Rs. 50,000/- to Rs. 25,000/-. Thereafter, appellant's plea seeking availability of Modvat credit was considered and after taking note of the submission made by the learned advocate appearing on behalf of the assessee that they had duty paying documents and if a chance is given, they would be able to satisfy the proper officer about their eligibility and entitlement to Modvat credit, the matter was remanded to Commissioner with the observations that an opportunity be  afforded to the appellant to substantiate their claim and then decide the matter. 3. In the de nov....

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....it in principle would be a too heavy a penalty to reckon with. Further, when the matter was remanded back for de novo adjudication, the KVSS was in operation. Had the party opted for availing KVSS, then the maximum amount of duty that the department would have earned would also have been that much which already admitted and paid by the party, i.e. Rs. one lakh twenty-five thousand only. Therefore, in my considered view the ratio laid down by the Hon'ble Tribunal in remanding the matter for extending the benefit of modvat credit to the party will lie in upholding the payment which has already been made by the party, i.e. to the tune of Rs. One lakh as if full and final payment. The rest of the amount should be treated as if in­admissible....