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TMI Blog2004 (6) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... M. Ltd., [ 1995 (1) TMI 70 - SUPREME COURT] . The Tribunal has clearly found in his order dated 6-10-98 that the department has not been able to prove that the bottles sold during the relevant years were out of stock of glass bottles on which Modvat credit was taken. If Modvat credit is not taken on these bottles then of course it is open to the assessee to sell the bottles in the market and there can be no restriction on the same. No permission is required from the Commissioner to clear the goods on which Modvat is not taken. The Tribunal's order was deemed contradictory as it upheld penalties without establishing duty liability. The judgment favored the assessee, concluding that no penalty could be imposed since the demand for duty wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odvat period duty paid inputs when no Rule required such permission/intimation? (V) Whether the CEGAT after holding as not proved the only charge levelled against the assessee in terms of Rule 57F, sustain the imposition of penalty in terms of non-observance of a new Rule 173-H which has never been enforced by the department in respect of duty paid inputs purchased from the market and on which no Modvat credit was taken and when the said new Rule was not invoked either in the show cause notice or in the adjudicating Commissioner's order or in the CEGAT's final order. 2. The assessee is a Company registered under the Indian Companies Act, which manufactures aerated waters of brand name Thumps Up, Limca, Gold Spot, Fanta etc. Modvat credit be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit was taken. We therefore give the appellants the benefit of doubt and hold that duty liability does not arise and hence the demand of duty is not correct and not sustainable in law." 4. However, the Tribunal went on to observe that penalty was imposable because even if the bottle were of pre-modvat period it was necessary for the appellant to intimate the department, which they do not do. However, penalty was reduced to Rs. 5 lacs on the assessee and Rs. 3 lacs on Shri Ashish Sethi, Director of the Company. As Shri Sethi did not take permission of the Commissioner before clearing the goods without payment of duty, penalty was imposed. 5. Subsequently the rectification application of the assessee was rejected by the order of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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