ORDER
S.L. Peeran, Member (J)
1. The Revenue is aggrieved with the order passed by the Commissioner (Appeals), in setting aside the imposition of penalty. However, he has confirmed an appropriate interest, which is required to be paid by the appellants. The findings recorded in para-3 of the impugned order are extracted below :
“3. I have given my careful consideration to the facts and circumstances of the case and the submissions made in the grounds of appeal and during the personal hearing. In this case the remittance of duty through modvat was rectified by paying through the PLA immediately on realizing their mistake. The credit was not a fresh credit. So no prior permission is required to be taken, as it was not a fresh credit. It was a carried over credit. The Consultant pleaded for restoration of modvat amount and for setting aside penalty. If the credit is not restored to amounts to double payment of duty. Therefore the credit may be restored. Reliance placed on Kumar Auto Cast Ltd., reported in 1996 (82) E.L.T. 137 (Tri.) and Punjab Maize Products reported in 1996 (84) E.L.T. 360 (Tri.). As regard penalty, I find that no fraud or suppression of facts is involved in this case. The appellant rectified the mistake even before the issue of SCN. Hence the penalty is set aside. Reliance placed on Indian Hums Pipe Company Ltd. case reported in 1998 (103) E.L.T. 77 (Tri.). However, they have to pay the appropriate interest.”
2. Ld. DR Shri C. Mani, submits that the appellants have committed an error in debiting the duty in their RG 23C Part-II, instead of debiting in the PLA. Therefore, the mistake is deliberate and they are required to pay the interest on delayed payment in PLA, for which penal action is required to be taken. The Revenue is made out grounds on the citations referred by the Commissioner (Appeals) in his impugned order. Ld. DR submits that Revenue has only pleaded on the ground made out and no such plea has been taken.
3. Ld. Counsel, J. Sankaraman, submits that they had erroneously utilised the modvat credit instead of debiting in the PLA was reversed in RG 23C Part-II. As soon as they realized their mistake, they have rectified the same even before the issue of show cause notice. Under such circumstances, penalty is not leviable. Ld. Counsel, relied on the Hon’ble High Court judgment rendered in the case of CCE, Tricky v. CEGAT, Chennai, reported in 2001 (133) E.L.T. 536. He submits that even in the case of Amritsar Crown Caps (P) Ltd. v. CCE, Chandigarh, reported in 2002 (140) E.L.T. 437, held that if the amounts are paid before the investigation or before the issue of show cause notice, in such circumstances, no penalty is leviable.
4. On a careful consideration, we notice that there was an error on the appellants in debiting the Modvat credit in RG 23C Part-II instead of in PLA. They, realised their mistake and rectified the same even before the show cause notice issued by the Department. Therefore, in such circumstances, it cannot be imputed that the appellants have committed an error with an intention to evade payment of duty. The citations referred by the Commissioner (Appeals) are on this point and in the subsequent citation referred by the advocate, a similar view has been expressed with regard to penalty that if the mistake committed by the appellant was rectified even before the issue of show cause notice, in such circumstances, no penalty is imposed. There is no error in the impugned order and the order is proper and legal. There is no merit in the Revenue appeal and the same is rejected.