2007 (12) TMI 29

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....he orders of the original authority demanding respectively Rs. 11,69,426/- and Rs.15,66,767/- being modvat credit availed by the appellants against additional duty of customs discharged between June'98 to September'98 using DEPB scrips on imports of inputs made by the assessee.  The Commissioner (Appeals), however, vacated a penalty of Rs. One lakh each imposed on M/s. Madura Coats Ltd. by the original authority. 3. The appeals filed by the assessee seek to vacate the demand confirmed by the lower appellate authority.  The assessee has relied on the ratio of the Tribunal's decision in M/s. Polyhose India Pvt. Ltd., Vs. CCE, Chennai reported in 2003 (152) ELT 361 (Tri.), wherein a ld. Single member of this Tribunal had decided t....

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....ies vacated by the Commissioner (Appeals) may be restored.  It is argued that mens rea was not necessary to impose penalty if the assessee had committed a default in complying with the statute.  The penalty imposed by the original authority was in order and justified.  The department has relied on the judgments of the Apex Court in Gujarat Travancore Agency Vs. Commissioner of Income Tax reported in 1989 (42) ELT 350 (S.C.) and R.S. Joshi Vs. Ajit Mills reported in AIR 1977 SC 2279. 8. The authorized representative of the assessee submits that penalty was not imposable as the assessee had bonafidely believed that it was eligible to avail modvat credit of CVD paid through DEPB scrips.  He also submits that the Tribunal....