2003 (8) TMI 95

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..... extended. He has noted the judgment of the Mitcon Jyothi as reported in 1998 (104) E.L.T. 744, wherein imposition of penalty for such procedural lapse has been held to be not sustainable. The appeal before the Commissioner was only on the short issue of imposition of penalty. 2. The revenue contended that the assessee had taken Modvat credit on 11-1-1997. They were in possession of bill of entry, wherein CVD assessed was shown as NIL and copies of receipts towards payment of CVD for Rs. 96,35,017/-. Mere receipts towards duty payment cannot be regarded as duty paid documents as prescribed under Rule 57G. The assessee had taken credit without valid documents and started utilising the said credit for paying duty on the final product. They h .....

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..... he order-in-original which compelled the Commissioner to set aside the penalty, as there was a clerical error showing in the bill of entry as NIL CVD, when in fact the payment had been endorsed. He also relied on the judgment rendered in the case of DCW v. Assistant Collector of Central Excise, Tuticorin as reported in 1996 (88) E.L.T. 31 (Madras) wherein in Para 5, the Madras High Court has held that penalty is not imposable when the action on the appellant is bona fide and there was no intention to evade payment of duty. It has also been held that the Tribunal have clearly established the bona fides of the assessee/petitioner in availing the Modvat credit. Therefore, penalty ought not to have been confirmed. The imposition of penalty in s .....

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..... when bona fides of assessee is established. It is also held that penalty is not leviable for mere procedural lapse in absence of intention of evade duty. Now, it is well settled in terms of the Apex Court judgment in the case of Collector of Central Excise v. HMM Ltd. (supra) cited by the Counsel that intention to evade duty or any action which is not a procedural lapse should be proved to impose penalty. In the case of Hindustan Steel Ltd. v. CCE as reported in 1978 (2) E.L.T. (J 159) (S.C.), the Apex Court has held that penalty is not leviable even for Veneal breach. In that view of the matter, the Commissioner is correct, legal and proper and as there is no infirmity in the same, the appeal of the revenue is dismissed. - - TaxTMI .....

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