JUDGMENT
V.K. Agrawal, Member (T)
1. The Revenue has preferred this appeal against the Order-in-Original No. 22/2002 dated 22.1.2002, by which the Commissioner has confirmed the demand of Central Excise duty against M/s. Advance Steel Tubes Ltd. and imposed a penalty of Rs. 50,000 on them.
2. Sri D.N. Choudhary, learned Senior Departmental Representative, submitted that the show cause notice was issued to the respondents for availing the exemption under Notification No. 202/88-CE. dated 1.3.88 wrongly; that the Commissioner under Order-in-Original No. 7/97 dated 18.9.1997 confirmed the demand of Rs. 11,26,235 and a penalty of Rs. 4 lakhs. However, on Appeal, filed by the respondents, the Appellate Tribunal vide Final Order No. 590/99A dated 3.5.99 remanded the matter for read judication with the directions that the Modvat Credit should not be denied on the ground of non-filing of declaration and whether the benefit under Section 4(4)(d)(ii) of the Central Excise Act, was admissible to them in the light of the Larger Bench decision in the case of Shree Chakra Tyres v. CC Madras; that the Commissioner read judicated the matter under Order-in-Original No. 33/2001 dated 30.5.01 which was again remanded by the Tribunal vide Final Order No. A/108/2001 NB dated 5.11.01 with the direction to consider the MODVAT claim and abatement of duty under Section 4(4)(d) (ii) of the Act; that on read judication the Commissioner under the impugned order has confirmed the demand of duty amounting to Rs. 2,39,817.50 p and imposed a penalty of Rs. 50,000 and has allowed Modvat Credit of the duty paid on the inputs as well as the abatement of duty under Section 4(4)(d)(ii) of the Act. He, further, submitted that while remanding the matter the Appellate Tribunal had not given any direction in respect of quantum of penalty, which implies that the Tribunal had upheld penal action ordered in the earlier Order-in-original; that therefore, the Commissioner cannot reduce the quantum of penalty under the impugned Order. Finally, he submitted that the benefit of Modvat Credit amounting to Rs. 46,168 has been wrongly allowed for the various reasons mentioned in the Appeal memorandum, such as absence of valid duty paying document, etc.
3. Shri B.L. Narasimhan, learned Advocate for the respondents mentioned that the Modvat Credit of Rs. 46,168 said to have been wrongly availed of by them, will be reversed by the respondents and they are not disputing the said disallowance of the Modvat Credit. On the question pf penalty, he submitted that when the Tribunal has remanded the matter for allowing the Modvat Credit and for re-determining the assessable value in terms of Section 4(4)(d)(i), the penalty is liable to be reduced as the amount of duty payable by them would come down considerably.
4. We have considered the submission of both the sides. As learned Advocate for the respondents is not contesting the disallowance of Modvat Credit amounting to Rs. 46,168 we hold that the Modvat Credit amounting to Rs. 8,17,678 allowed by the Commissioner will be reduced by the said amount i.e. Rs. 46,168. To this extent, the Appeal filed by the Revenue is allowed. On the aspect of quantum of penalty, we agree with the learned Advocate for the respondents that the quantum of penalty has to be reduced in view of the fact that total duty liability of the respondents has come down on account of availability of Modvat Credit and re-determination of the assessable value. We therefore, do not find any reason to interfere with the imposition of penalty of Rs. 50,000 on the respondents. The Appeal is disposed of in the above terms.