2014 (3) TMI 791

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....ed in respect of Boomer Tattoo (new design)/Printed Transfers, during the period September, 2001 to August, 2002. The show cause notice issued on 3-10-2002 alleged that the said Tattoos cannot be considered to be eligible Modvatable inputs. 2. It is seen that the show cause notice was dropped by the Commissioner vide his order dated 1-3-2004 after laying down that the Modvat credit in respect of said Tattoos/Printed Transfers is available to the assessee. The said order of the Commissioner was appealed against by the Revenue before Tribunal. Tribunal vide its Final Order No. 98/2010-Ex., dated 24-2-2010 [2010 (254) E.L.T. 125 (Tribunal)] allowed the appeal filed by the Revenue by observing as under :- "6. The point having be....

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.... above observations and findings of the Tribunal as regards penalty, the assessee filed a reference application before the Hon'ble High Court of Punjab & Haryana at Chandigarh raising the following questions of law :- "(iii) Whether the order passed by the Tribunal is correct in imposing penalty on the appellants when the issue involved in the present case related to interpretation of the Cenvat Credit Rules. (iv) Whether the order passed by the Tribunal is correct in imposing penalty on the appellants when the Department in its appeal before Tribunal had not challenged the non-imposition of penalty by the Adjudicating Authority." 5. The said petition filed before the Hon'ble High Court of Punjab & Haryana stands dis....

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.... filed by the respondents for the period September, 2001 to August, 2002. As such, it becomes clear that fact of taking Modvat credit in respect of disputed items was being represented by the respondents in the ER-1 returns. The said issue is a genuine issue of legal interpretation of the provisions of Modvat Rules. If the credit was being availed by reflecting the same in the statutory records and proper ER-1 returns were being filed, it cannot be said that there was any suppressions or misstatement with any mala fide intent on the part of the assessee, thus justifiably invoking penal provisions against them. 8. Apart from above, we also note that the dispute for the period prior to the period involved in the present appeal was als....