1996 (2) TMI 153 - HC - Central Excise

Summary

Issues involved: The issues involved in this case include the availing of Modvat credit, imposition of penalty under Rule 173Q, and the interpretation of procedural rules related to Central Excise.

Summary:
The petitioner, a manufacturer of excisable goods, filed a Writ Petition seeking relief from a penalty imposed under Rule 173Q for availing Modvat credit on imported Vinyl Chloride Monomer (VCM). The petitioner contended that they had complied with Modvat rules, but faced challenges when the Assistant Collector refused to deface Bill of Entries and insisted on supplementary gate passes. Despite compliance, the Assistant Collector imposed a penalty of Rs. 42,00,000 under Rule 173Q. The petitioner appealed, and the penalty was reduced to Rs. 2 lakhs by the Collector of Customs & Excise (Appeals). Subsequently, the Tribunal confirmed the penalty, leading the petitioner to file a Writ Petition challenging the decision.

The Tribunal acknowledged the petitioner's plea of paying substantial duties annually and the inadvertent nature of the Modvat credit availed. The petitioner argued that the penalty was disproportionate and not warranted for a procedural lapse. The Court noted the bona fides of the petitioner and the genuine difficulty faced in implementing procedures. While recognizing limitations in interfering with factual findings, the Court remitted the matter to the Assistant Collector for reconsideration based on the arguments presented, emphasizing the need to assess the leviability of the penalty in the specific circumstances of the case.

In conclusion, the Writ Petition was disposed of with directions to the Assistant Collector to review the matter considering the arguments raised by the petitioner and the factual findings of the previous authorities.