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TMI Blog2004 (6) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... rs etc. were damaged in this fire. The lower authority found. (i) Modvat credit availed on inputs, but which had not used in or in relation to the manufacture of the final products, but were lost in fire was not admissible. (ii) Credit on inputs in work-in process was not available since they did not result in any final product, having been lost in fire. Therefore the credit could be recovered under Rule 57-I & the Rule 173Q & a demand of Rs. 39,73,208.16 was confirmed along with interest under Section 11AA of the Central Excise Act, 1944 & penalty of Rs. 25 lakhs under Rule 173Q was imposed. 2. The CCE (A), after hearing the appellants found - (i) Rule 57D cannot assist the appellants. (ii) Rules 57-I(1) & (2) would be applicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of Section 11A of the Act, the provisions of Section 11AB automatically apply. The argument of assessee that only provisions of Section 11AA apply in this case is devoid of any merit. As a matter of fact, the provisions of Section 11AA of the Act have become otiose by the amendment of Section 11AB w.e.f 11-5-2001 as the amended Section 11AB is applicable to all cases of delayed payment. The distinction made earlier in the Act, between simple delay in payment beyond three months and fraudulent short payment and evasion etc. has been done away with. In view of the aforesaid finding that provisions of Section 11AB of the Act are applicable in the instant case, the Revenue will be adequately compensated for the monetary loss suffered and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be recovered as per provision of Rule 57-I(1) as applicable on day of the fire i.e. 21-2-96. Rule 57-I(1) is not applicable as invoked, on taking of credit, that could not be questioned, on date it was taken. The eligibility could not be doubted in any manner Rule 57-I(2) provides for accounting & utilisation and disposal of the inputs in the manner specified under that rule. Once the inputs are issued to the manufacturing floor, from the stores after receipt in the factory, the further utilization of the same cannot be normally questioned. They can be lost due to normal process of a technological loss reversals are therefore not called for. The ld. Commissioner has relied upon the cantena of decisions that grant the eligibility if the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 49(1) first proviso to Rule 49. (d) The term "any goods" could extend to raw material, capital goods, unfinished goods, and finding on that have to be have arrived. The Commissioner has to arrive at a finding on the scope of these proviso. The order is therefore set aside & remitted to the Commissioner to rehear the appellant & redetermine the application for remission. (e) The penalty under Rule 173Q has been rightly set aside by the ld. CCE (Appeals) since Rule 57-I(4) provides that penalty could be arrived at only if the ingredients therein are satisfied. In the present case the appellants have been found to be not having any mala fides & therefore the penalty set aside vide Order No. RJB/M-II/179/2000, dt. 10-12-2002 against whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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