ORDER
R. Jayaraman, Member (T)
1. Though, this day only stay application was listed for hearing, after hearing both the sides and with their consent, we have decided to take up the appeal itself for disposal.
2. The appeal is against the order in original No. 268/Central Excise/93 dated 5-11-1993, passed by the Collector of Central Excise, Aurangabad, imposing penalty of Rs. 1,00,000/- on the appellants and also ordering adjustment of the amount of Rs.1,80,65,993 already paid to be adjusted against the demand made in the show cause notice.
3. Shri Bulchandani, the ld. Advocate, appearing for the appellants, pleaded that they were bringing inputs under the modvat scheme. Because of the paucity of space, they stored the modvat inputs in their premises, which is situated about 5 kms away from the factory. Before such storage, they also sought for permission from the Supdt. He referred to the relevant portion of the order to point out that this position is not disputed. However, the Supdt. Has not responded to their letter. However, when the officers pointed out that modvat credit cannot be taken in respect of inputs not received in factory, they immediately paid up the entire demand within 4 days and they took credit of duty paid on the inputs, as and when they were brought in their factory. In fact, they always have modvat credit balance to the extent of more than Rs. 5 crores on an average and thus availing of the credit is not with any intention to save on interest. Though the Collector has observed that he would only like to impose a token penalty, the penalty of Rs. 1,00,000/- cannot be considered to be a token one. He therefore, pleaded that having regard to the aforesaid factual position, which is not disputed even in the order, the penalty should be set aside.
4. Shri Ravinder Jain, the ld. JDR, however, contended that considering the duty involved in this case, the penalty of Rs. one lakh is a token one and hence the penalty should not be disturbed.
5. After hearing both the sides, we find that the factual position is not disputed. The appellants, because of the paucity of space, have sought for permission to store the modvat inputs in their own premises outside the factory. The Range Supdt. does not seem to have responded to their request. All the same, because of the constraints in space, they appear to have stored the modvat inputs outside their factory. There is no allegation of double credit having been taken. Moreover, the amount was paid within 4 days when it was pointed out to the appellants. Having regard to this, we consider the penalty of Rs. one lakh cannot be construed to be a token one and hence we reduce the same to Rs. 2,000/- (Rupees two thousand only) and dispose of both the stay application as well as the appeal.