2010 (8) TMI 428

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....t against the order passed by the lower authority in relation to the issue pertaining to the penalty was allowed and the penalty of Rs. 50 lacs has been imposed against the appellants under Rule 173Q and Rs. 5,000/- against the Manager of the Company. 3. The appellants were registered with the Central Excise Department for manufacture of excisable goods, namely, caustic soda, chlorine, fabrication of tanks etc. The appellants had procured various capital goods in respect of which the appellants were entitled to avail Modvat credit relating to the duties paid thereon. However, the Modvat credit could have been taken only after installation of those capital goods and not prior to that. The appellants, however, sought to avail the cred....

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....peals) while allowing the appeal imposed the penalty of Rs. 50 lacs against the appellants and upheld the penalty imposed against the Manager of the appellant-Company. 5. On hearing the learned advocate for the appellants and learned DR for the respondent, it is seen that, undisputedly, the provisions of law comprised under Rule 57Q(7) provide that, the credit of the specified duty on capital goods other than those capital goods covered under S. Nos. 5, 7, 10, 11 and 12 of column (2) of the Table below sub-rule (1) of the said Rule and received in the factory on or after 1st day of January, 1996 shall not be taken on a date prior to the date on which such capital goods are installed or, as the case may be, used for manufacture of ex....

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....o the notice of the appellants about the said irregularity, the appellants suo motu had reversed the credit. 8. It is also not in dispute that the appellants were entitled to avail the credit in question. The only irregularity which was committed by the appellants was that, the said credit was shown to have been availed in the records prior to the installation of the capital goods. At the same time, it is neither in dispute nor can be disputed in the facts and circumstances of the case that there was no occasion for the appellants to utilize the credit, so availed, and, in fact, they had not utilized the same till they availed the said credit lawfully after installation of the capital goods. 9. The records, therefore, disclo....