1995 (12) TMI 148 - AT - Central Excise

Summary

Issues:
1. Penalty imposed for availing Modvat credit without waiting for acknowledgement of declaration under Rule 57G(1).
2. Penalty imposed for alleged shortage of goods and incorrect payment of duty.

Analysis:
1. The appeal before the Appellate Tribunal CEGAT, Delhi challenged penalties imposed by the Additional Collector of Central Excise, Jaipur. The first issue revolved around a penalty of Rs. 1,000 imposed on the appellants for availing Modvat credit of Rs. 62,335 without waiting for the acknowledgement of the declaration filed under Rule 57G(1). The appellants contended that they had indeed filed the required declaration and were regularly filing RT-12 returns during the relevant period, showing the Modvat credit availed. The Tribunal agreed with the appellants, deeming the penalty as purely technical and unsustainable, ultimately setting it aside.

2. The second issue involved a penalty of Rs. 15,000 imposed on the appellants under Rule 173Q(1)(a) for alleged shortage of 164.1 kgs of DPC Copper Wire and incorrect payment of duty at 5% instead of 10% on goods valued at Rs. 5,300. The appellants admitted to not paying the correct duty and had deposited the differential duty of Rs. 5,300. The Tribunal found the penalty sustainable due to the admitted incorrect payment and unexplained shortage. However, considering the circumstances and the reduced penalty amount in relation to the differential duty, the Tribunal reduced the penalty from Rs. 15,000 to Rs. 1,000. The Tribunal disposed of the appeal with the modified penalty amount.

In conclusion, the Tribunal upheld the penalty under Rule 173Q(1)(a) but reduced it significantly based on the facts and circumstances of the case. The judgment highlighted the technical nature of the first penalty, leading to its dismissal, while acknowledging the substantiated grounds for the reduced penalty in the second issue.