9911796707
TMI Blog1998 (2) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2. The facts leading to the appeals are that the appellants took Modvat credit on certain items. The lower authorities after considering the submissions made allowed Modvat credit on certain items and disallowed Modvat credit on certain items on different counts. 3. Shri R. Swaminathan, the learned Consultant appearing for the appellants narrating the facts submitted that he is contesting disallowance of Modvat credit of Rs. 8,43,785/- and is not contesting the balance amount of Rs. 6,68,948/-, as the amount has already been reversed. He submitted that the main grounds on which he is contesting the disallowance of Modvat credit are :- (a) Disallowance of Modvat credit on not pre-authenticated invoices. (b) Disallowance of Modvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit on original documents, the learned Consultant submitted that the position is well settled by now by various decisions of the Tribunal, wherein it has been clearly held that in the initial stages of introduction of the invoice system Modvat credit could be taken on the strength of original copy of the invoices. In support of this contention, he cited and relied upon the decision of the Tribunal in the case of Zinc-O-India v. Collector of Central Excise reported in 1996 (88) E.L.T. 373. He also supported his contention by citing the case of Commissioner of Central Excise v. Shiv Shakti Tube Pvt. Ltd. reported in 1997 (90) E.L.T. 547 (Tribunal) = 1997 (18) RLT 622. Further the learned Consultant submitted that similar view was taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsultant submitted that the appellants had no doubt taken credit of Modvat but had not utilised the same. He submitted that utilisation is an important aspect if the credit subsequently is found not admissible. He submitted that the appellants awaited the decision of the authorities for more than a year to avail the Modvat credit taken. He submitted that the lower authorities upheld disallowance of Modvat credit to the extent of Rs. 15 lakhs and therefore, penalty of Rs. 5 lakhs is unwarranted and too harsh. The learned Consultant submitted that there is no case for imposition of penalty inasmuch as the credit was not utilised and most of the lapses were procedural or curable. 9. Countering the arguments, Shri D.K. Nayyar, the learned JDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. About the imposition of penalty, the learned Consultant submitted that Rule 173Q (bb) provides for penalty not on the utilisation of Modvat credit but it speaks on credit taken. The learned DR submits that in the instant case, Modvat credit was wrongly taken by the appellants and therefore, penalty has rightly been imposed on the appellants. 12. The learned DR further submitted that in so far as the other categories are concerned, they will need verification by the Field Officers. 13. Heard the submissions of both sides. 14. On a careful consideration of the submissions made, we agree with the categorisation of the case by the learned Consultant and would like to deal with them categorywise. 15. In so far as non pre-authenticatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al that Modvat credit could be taken on the strength of original invoice during the initial period of introduction of Modvat credit scheme on the strength of invoice we do not find any reasons to disagree with the contention of the appellant and hold accordingly. 17. In so far as the rate of duty not in conformity with the rate prevailing during the material period is concerned, we find that the position was not clarified by the learned Consultant for the appellants, as he could not produce any document to show the exact amount of duty paid on the goods. Therefore, on this aspect we hold that the appellants have not been able to prove their case. 18. In so far as disallowance of Modvat credit amounting to Rs. 29,346/- on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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