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TMI Blog2004 (1) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... s : (i) Demanded a sum of Rs. 2,49,55,313/- under Rule 57-I of the Central Excise Rules, 1944 allegedly representing Modvat credit irregularly taken; (ii) Imposed a penalty of Rs. 1,79,41,162/- under Rule 57-I(4) of the Central Excise Rules, 1944; (iii) Imposed a penalty of Rs. 80 lakhs on the Company under Rule 173Q of the Central Excise Rules, 1944; (iv) Imposed a penalty of Rs. 5 lakhs each on Shri B. Nagi Reddy, Director - Operations and Shri. K. Rami Reddy, General Manager, under Rule 209A of the Central Excise Rules, 1944. (b) During the period April, 1995 to August, 1999, the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pectively, proposing to demand the amounts representing the Customs Duty from the appellants all over again, in spite of the fact that the appellants had sent all the amounts in question through demand drafts in favour of the Commissioner of Customs. (c) As a sequel to the above proceedings, the present SCN dated 28-3-2000 was issued to the appellants proposing to deny Modvat credit of 74 Bills of Entry received by the appellants during the period 2-4-1995 and 30-8-1999. (d) The Commissioner of Central Excise, after accepting that the proceedings under the Customs Excise Act for disallowing the credit and the recovery of duty under Customs Act initiated by Chennai Customs, are interrelated, has, however, passed the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct cannot be sustained. (b) There can be no intention on the part of the appellants who have availed the credit of C. V. duty when the Company has sent the required amounts including the amounts of Basic Customs duties by demand draft addressed to Commissioner of Customs, Chennai. They which have been found to have been credited in the Government Treasury as Revenue. Rule 173Q(1)(bb) mandates that "only if credit is taken which a manufacturer knows or which he has reasons to believe was not permissible under the rules" then only penalty could be imposed. Since no material has been found, to implicate the Company and its Directors Shri Rami Reddy (General Manager) one of the appellants herein, to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Act, nor have they being found so. Therefore no goods are found to be liable for confiscation. Hence penalties under Rule 209A are not called for and cannot be upheld. (f) The plea of limitation in this case is also upheld since in the terms of Trade Notice based on Board's letter F. No. 211/23/68-CX-6, dated 28-5-1986 requires the officer to verify the genuineness of the documents before de-facing the same. If these instructions were complied then this detection would have come to knowledge much earlier. In any case if the verification by the officers could not detect to be fraud it is too late for the day to held the appellants and its Directors to be in the knowledge of the same. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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