TaxTMI 
TaxTMI 
2002 (1) TMI 213
X X X X Extracts X X X X
X X X X Extracts X X X X
....rregular Modvat credit under Rule 57-I of the Rules, imposed penalty of Rs. 10,17,000/- in terms of Rule 57-I(4) and further imposed penalty of Rs. 50,000/- under Rules 57Q and 226 of the Rules, on the appellants. 2.The appellants are engaged in the manufacture of radiators. On 2-4-99, the preventive staff of the Central Excise visited their factory premises and Ranjodh Singh, Director of the company was present there. On checking of the record, excess stock of 102 pieces of radiators over and above the recorded balance in RG-1 register, was found. In addition to this, officers also found shortage of 11.330 MT of copper foil and 33.253 MT of brass foil which were the main raw materials being used in the manufacture of radiators. Ranjodh Si....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n if it was assumed that the appellants had failed to account for the inputs utilised during the month of Feb. and March, 1999 as taking of the Modvat credit by them under Rule 57-I was not improper. The case against the appellants at the most fell within the ambit of Rule 57-I(2) of the Rules under which they could be directed to reverse the Modvat credit. Regarding imposition of penalty under Rules 173Q and 226 of the Rules, the Counsel has contended that Rule 173Q was not attracted as excess radiators were only found lying in the factory premises and there was no evidence to show any motive or attempt on the part of the appellants to clear the same without payment of duty. Similarly, regarding confirmation of demand in respect of irregul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng of the Modvat credit on the inputs during the disputed months, by fraud, mis-representation, collusion etc. had never been the case of the Revenue before the adjudicating authority. The allegations levelled against them are that they have failed to account for inputs on which they had claimed Modvat credit during the month of Feb. and March, 99. To their case, the appropriate clause, therefore, applicable is (2) of Rule 57-I which enacts that if any inputs in respect of which credit has been taken are not fully accounted for, the manufacture shall, upon a written demand being made by the A.C., pay the duty leviable on such inputs within six months from the date of the receipt of the notice. Under this clause, no imposition of penalty has....