2011 (3) TMI 512

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....it. 2. The assessee - M/s. Bharat Electronics Ltd., Jalahalli, Bangalore is a holder of Central Excise Registration No. 5/92. They are in the business of manufacture of various electronics and telecommunication components as well as defence equipment. They are availing exemptions from payment of central excise duty under various notifications for certain clearances of the equipment and components manufactured by them. They also availed Modvat/Cenvat credit for the inputs used in the manufacture of their final products during the periods 1996-97 to 2000-01. A show cause notice came to be issued to the aseessee accusing them for not maintaining separate inventory accounts of the receipts and use of inputs which are used in or in relat....

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....for the recovery of the amount during the relevant period. It is only to overcome the said flaw in law, that Clause 82 of the Finance Act, 2005 (hereinafter referred to as 'the Act') was promulgated to recover the amount retrospectively. The Explanation to Rule 82 clearly removes any doubt pertaining to non-punishment of an offence or omission on any person for violation of the Rules. It also recorded a finding that there was no suppression of facts and the assessee being a PSU unit was not to gain, anything in the matter. Therefore, the prayer for setting aside the penalty and interest was allowed. Aggrieved by the said order, the revenue is in appeal. 5. The learned Counsel for the revenue assailing the impugned order contends tha....

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.... has wrongfully availed modvat/cenvat credit. On being pointed by way of a Show Cause Notice, they have promptly reversed the credit. They also paid a substantial amount of duty payable even before the order in original was passed. After the order was passed, within the stipulated time, the balance duty leviable has been paid. Though the amendment was retrospective in nature, the penalty being penal in character cannot be retrospectively imposed and therefore, the tribunal has rightly set aside the order imposing the penalty. 8. In so far as the payment of interest is concerned, as is clear from the terms of the amended provisions, it is payable in the event of the assessee not paying the amount held to be due under the order within....