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TMI Blog1994 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... are alleged to have been utilised in the manufacture of certain final products cleared on payment of duty but the said final products were not declared. A show cause notice has been issued on 28-2-1991 on the basis of this allegation seeking to recover the credit taken and availed of during the period 1-3-1986 to 31-3-1987. As per the order of the Collector an amount of about Rs. 4.54 crores is sought to have been quantified as the duty amount payable. The Collector has imposed a penalty of Rs. 5 lakhs and also confiscated the plant and machinery with an option to redeem the same on payment of a fine of Rs. 2 lakhs. 2.Shri Atul Sethalwad along with Shri C.M. Korde, advocates represented the appellants. He does not dispute the following f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omission cannot be viewed as a case of wilful or deliberate omission to defraud duty, justifying the extended period or for invoking penal provisions of the law. 4.1 After hearing both the sides, we find that there is no dispute that the inputs received under the Modvat scheme go into the manufacture of the declared final product namely Motor vehicle. Hence no objection can be taken for utilisation of the credit earned by these inputs in regard to the duty payable on these declared final product namely Motor vehicle. We agree that when I.C. engines motor vehicle parts are not declared as final products, they cannot utilise the credit towards the duty payable on these items. But, then, even if credit is denied and clearance of these ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2 In the context of the above position in law, their omission to declare I.C. engine and M.V. parts as final product cannot be construed to be a case of wilful mis-statement or suppression of facts, justifying extended period. It cannot also be construed to be a case of deliberate violation of Rules with an intention of evading duty. Let us see the situation from this angle. Had the Dept. objected to utilisation of credit towards duty paid on I.C. Engines and M.V. parts at the time of assessment of R.T. 12 returns, they would have paid the duty on these goods through PLA and restored the credit in RG 23A II, which can be used for clearance of motor vehicles. Hence there is practically no gain to them in their omission to declare I.C. en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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