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TMI Blog2000 (12) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... iyanka Metals and M/s. Gautam Metals Industries Others alleging that the appellants had taken Modvat credit illegally in-as-much as it was alleged that M/s. Kejriwal Enterprises availed Modvat credit of duty paid on copper bars without actually receiving the bars in the factory premises and utilised the said Modvat credit for payment of duty on goods which were never produced out of the said bars. It was alleged that M/s. Kejriwal Enterprises issued 57F(2) Challans to various rollers without sending/receiving any goods. It was also alleged that M/s. Kejriwal sold the copper bars in the open market without debiting the Modvat credit availed of and that they issued Bogus Gate Passes to various persons without sending the goods so as to faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, submits that there was no loss of Revenue to the authorities. He submitted that since Modvat credit was utilised for payment of duty on enamalled copper wire and duty on enamalled copper wire has been paid back to the Revenue, there was no question of any demand of duty from the appellants. 5. He submits that penalty has been proposed under Rules 52A, 173Q, 226 and 209A. He submits that penalty under Rule 52A can be imposed only where excisable goods are involved. He submits that in the instant case it has been held by the authorities below that there was no movement of the goods and therefore, the Ld. Counsel submits that the provisions of Rule 52A are not applicable to the facts of the present case. 6. Ld. Counsel submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner deals with any excisable goods which he knows or has reason to believe, are liable to confiscation under the Act, or these rules shall be liable to a penalty not exceeding three times the value of such goods. He submits that the facts of the case do not warrant imposition of penalty on any person under Rule 209A. 8. Shri L.P. Asthana, Ld. Counsel submits that M/s. Gautam Metals cannot be treated as manufacturer in-as-much as they were only converting copper wire above 6 mm to copper wire of less than 6 mm. He submitted that there are a number of decisions on the issue that conversion of copper wire of thickness of 6 mm and above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture as it does not result in emergence of a new commodity. Ld. Counsel submits that the decision of the Tribunal in the case of Premier Winding Wires and Conductors is pertinent in-as-much as it refers to drawing of wires from copper wire rods and is also a case pertaining to the new tariff. He submits that since the activity undertaken by them did not amount to manufacture, therefore, M/s. Gautam Metals were not manufacturer. He submits that since M/s. Gautam Metals were not manufacturer, therefore, they were not liable to penalty under Rule 173Q. Ld. Counsel made an alternative plea that the allegation against the appellant was that they were dealing in challans issued under Rule 57F(2). He submits that there was no evidence brought ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held that M/s. Kejriwal Enterprises had availed illegally credit of Rs. 11,78,197/-. Ld. Commissioner also disallowed Rs. 17,29,690/- taken as credit by M/s. Priyanka Metals. Under this Order-in-Original the Commissioner has imposed a penalty of Rs. 12 lakhs on M/s. Kejriwal Enterprises and Rs. 29 lakhs on M/s. Priyanka Metals. He has also imposed a penalty of Rs. 10 lakhs on Shri Sunil Kejriwal and Rs. 5 lakhs on Shri K.C. Kejriwal. 11. We note that M/s. Kejriwal Enterprises and M/s. Priyanka Metals have been receiving duty paid copper rods. We note that these copper rods were being sold by these two units in the market. We find that credit was being taken by these two units on the strength of gate passes. We have perused the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. In so far as imposition of penalty on Shri Sunil Kumar Kejriwal and K.C. Kejriwal is concerned, we note that no doubt these two persons were concerned with the illegal disposal of copper wire rods, therefore, penalty is warranted in their case. However, looking to the facts and circumstances of the case, we find that the quantum of penalty on these two persons is on the higher side, the same is, therefore, reduced to Rs. 5 lakhs in the case of Shri Sunil Kejriwal and Rs. 2.5 lakhs in the case of Shri K.C. Kejriwal. 14. Separate SCNs were issued to five persons concerned along with Gautam Metal Industries. We find that there was a lot of case law produced by the Ld. Counsel to prove that reducing the gauge of wire did not amount to man ..... X X X X Extracts X X X X X X X X Extracts X X X X
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