2004 (10) TMI 530 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty under Rule 57-I of Central Excise Rules for failure to comply with Rule 57CC.

Analysis:
The appellant, a PSU Unit, obtained permission to appeal arising from an Order-in-Original where the Commissioner dropped proceedings for duty recovery but imposed a penalty of Rs. 12,00,000 under Rule 57-I for non-compliance with Rule 57CC. The Counsel argued that Rule 57-I was wrongly invoked, as it applies to wrong availment of Modvat credit, which was not the case here. The Commissioner's finding of no duty demand and no availed credit led to the submission that no penalty should be imposed. Citing the Supreme Court's judgment in Hindustan Steels Ltd. v. State of Orissa and a Tribunal's decision in Pushpaman Forgings Ltd. v. CCE, the Counsel contended that 8% demanded under Rule 57CC is neither duty nor credit, hence not applicable. The Tribunal upheld this argument, stating that penalty requires statutory provision and must be linked to intent to evade duty and cause revenue loss, which was absent here. Consequently, the imposed penalty was set aside, allowing the appeals with consequential relief.