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TMI Blog2001 (2) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... edit even in respect of those inputs, which were not used in the manufacture of their final products. The Modvat credit had also been wrongly availed of in respect of the inputs received short or received in damaged condition. These inputs had not been used in or in relation to the manufacture of their final products. The amount of Modvat credit wrongly availed of came to Rs. 59,19,329/- for the period 1-4-1994 to 31-12-1998 which was demanded under show cause notice dated 27-2-1999, invoking the extended period of limitation. In reply, BHEL submitted that Modvat credit was taken by them on receipt of the documents/inputs, and it takes some time to verify the actual receipt of the goods. If the goods are found damaged then they reversed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts which were received short or which were received in damaged conditions were recorded in their accounts. When the inputs were removed without use in the manufacture of their final products, they had reversed the Modvat credit. The appellants were under bona fide belief that till the damaged inputs were in the factory premises, no reversal of Modvat credit was required. For the inputs received short, it was his plea that the Modvat credit was taken on the strength of duty paying documents and that they were not contesting the demand. It was his plea that a very high penalty had been imposed by the adjudicating authority and that imposition of such a high penalty, was not justified in the facts and circumstances of the case. In reply, Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Modi Rubber Ltd. v. Commissioner of Central Excise, Meerut - 1999 (111) E.L.T. 215 (Tribunal) - Mens rea is not pre-requisite for imposition of penalty. However, the quantum of penalty imposable was dependent on the gravity of the offence. 4. We have carefully considered the matter. The appellants had not contested the demand of central excise duty in these proceedings. We, therefore, confirm that part of the impugned order, which relates to the demand of central excise duty. 5. As regards the penalty, from the facts and circumstances of the case, it is seen that the appellants had availed of the Modvat credit even when the inputs had not been received in their factory. The Modvat credit had also been availed of in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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