2010 (8) TMI 321

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....llant. Shri N. Phadnis, Advocate, for the Respondent. [Judgment per : J.P. Devadhar, J. (Oral)]. - Heard learned Counsel for the parties. 2.The appeal is admitted on the following questions of law : (A)Whether imposition of penalty under Rule 173Q of the erstwhile Central Excise Rules, 1944 read with Rule 57-I(4) ibid, is to be necessarily interpreted as mandatory penalty under Rule....

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....nd that the said M/s. Tara Re-rolling Mills had neither received any raw material in their factory nor undertaken any manufacturing activity in their factory and had issued fabricated invoices, notice was issued to the respondent-assessee to show cause as to why the Modvat credit of Rs. 2,63,509/- should not be disallowed and penalty and interest under Rules 57-I(4) and 57-I(5) of the Central Exci....

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....ave any retrospective effect. However, the said Rules would be prospectively applicable to the case of the assessee. This Court in the case of Commissioner of Central Excise and Customs, Raigad v. Fibre Foils Ltd. [2009 (241) E.L.T. 201 (Bom.)] has held that penalty under Rule 57-I(4) is mandatory. In these circumstances, the Tribunal was not justified in deleting the imposition of penalty and int....