ORDER
S.L. Peeran, Member (J)
1. The appellants are aggrieved with the order-in-appeal passed by the Collector (Appeals), New Delhi. The appellants are engaged in the manufacture of motor vehicle chassis falling under Chapter 87 of Central Excise Tariff Act, 1985. They were availing pro-forma credit under Rule 56A of Central Excise Rules, 1944 before 1-3-1986 and was having a balance of Rs. 8,34,986.55 as BED and Rs. 3,519.33 as SED as on 1-3-1986 in the RG-23 Part II being maintained by them under Rule 56A. They filed their declaration opting for Modvat under Rule 57A on 12-3-1986 and from 1-3-1986 to 12-3-1986 and took the credit of Rs. 6,46,950.00. It is alleged by the Department that they had, before filing the declaration, a balance of Rs. 14,81,938.55 as BED and Rs. 3,519.33 as SED in RG 23 Part II. It is alleged that as per Rule 57H(3), this amount of credit lying unutilised could have been transferred to the RG-23 A Part II account maintained under Rule 57A, after the same was allowed to be transferred by the Jurisdictional Asstt. Collector. Further, it is alleged that they had transferred the said amount on their own and utilised the same for clearing the exciseable goods, when they had insufficient balance in the P.L.A. and RG-23A Part II. On being pointed out by the Range Supdt., they debited the same on 4-10-1986. It is alleged that again on 29-11-1986, knowing that they cannot utilise the amount without the permission of Asstt. Collector, they had again utilised the credit of Rs. 14,81,938.55 and cleared the goods by debiting Central Excise Duty amounting to Rs. 4,25,445.60 from the RG-23 Part II and utilised the balance amount in RG-23 Part II in December, 1986. However, they had debited the amount of Rs. 14,81,938.55 on 1-4-1987 vide RG-23A Part II. Therefore, it is alleged that they had contravened Rules 9(1), 57A, 173G and 57-H of Central Excise Rules, 1944 having cleared the goods involving Central Excise duty to the tune of Rs. 14,81,938.55 when there was no sufficient balance in RG-23 Part II account or PLA and hence they were liable to penal action under Rule 173Q of Central Excise Rules, 1944.
They filed the reply to the show cause notice. They had pleaded that after filing of declaration as required under Rule 57G on 12-3-1986, they had requested for transfer of credits lying in proforma credit account and had been reminding the Department for permitting such a transfer. They had also claimed input duty in respect of receipts between 1-3-1986 to 10-3-1986 as per Rule 57-H. They have stated that they were advised to avail the same and as the permission could be granted post facto. Therefore, they had availed the benefit and the same had not been objected to by the Departmental Official on regular audits. In October, 1986, while finalising the assessment relating to May, 1986, the Department had taken the objection and therefore, they had debited the entries. They have stated that as no communication of the Department was received even after the lapse of 6 months from the date of original claim for credit under Rule 57H, therefore, they had again availed the credit in November, 1986. This credit had again been objected to by the Department in April, 1987 while the return for October, 1986 was finalised. Therefore, they had debited the amount. They have stated that the Asstt. Collector had regularised the credit by his letter dated 18-11-1987 and therefore, it follows that there had been validity from the Department.
2. The ld. Asstt. Collector has held that as per Rule 57H(3), it is the Asstt. Collector who has to grant permission to utilise the credit of duty lying unutilised as on 1-3-1986 in RG-23 Part II to be transferred to RG-23A II. He has noted that the appellant had suo moto taken the credit without permission thereby violating the provisions of the Central Excise Rules twice pertaining to credit on being pointed out. He has also noted that they had cleared the exciseable goods against the above credit which were not allowed to them at the time of removal of the goods and as they had insufficient balance in PLA at that time. On the basis of these findings, he held that the appellant is guilty of contravention of Rules 9(1), 52A, 173G and 57H of Central Excise Rules, 1944 and hence are liable for penal action under Rule 173Q. Therefore, he imposed a personal penalty of Rs. 5,000/-. This was contested before the Collector (Appeals) unsuccessful and hence,this appeal.
3. The appellants have sent a letter seeking the case to be decided on merits.
4. We have heard ld. DR. The ld. DR pointed out to the facts and circumstances of the case and submitted that violation of the Rule is very clear and the same has been admitted by the appellants. Therefore, there is no infirmity in the order and that the personal penalty imposed against them is also very meagre. Therefore, he submitted that there is no merit in the appeal and same is required to be rejected.
5. We have carefully considered the submissions made in the appeal memo and have also gone through the records. There is no dispute in this matter about the availing of the proforma credit before the permission is granted by the Asstt. Collector. This violation of the rule had been committed twice by the appellant and it was only after the Department took objection for such availing of the credit without permission, that they had reversed the same. The plea taken by the appellant that they had filed their claim and the same had not been considered for a long time and that they were told to transfer the credit and utilise the same and Department post facto granted permission is not substantiated. There is no evidence on record that Department had given oral instructions to them. Rule 57H(3) is clear that Asstt. Collector has to allow the credit of duty lying unutilised as on 1-3-1986 in RG-23 Part II to be transferred to RG-23A II. Even before the permission is granted, the appellants suo moto had taken the credit of duty. Therefore, the violation of the rule is quite clear. The imposition of personal penalty of Rs. 5,000/ is not excessive. There is no infirmity or illegality in the order and the same is required to be confirmed. Therefore, the appeal is dismissed.