ORDER
G.R. Sharma, Member (T)
1. The appellants have filed this appeal being aggrieved by the order passed by the Collector, Central Excise, Allahabad under which he imposed a penalty of Rs. 20,000/- on the appellants.
2. The facts of the case as set out in the memo of appeal are that the appellants are engaged in the manufacture of switchgear & repairs, transformers and copper scrap falling under Chapter Headings 8537.00,8504.00 and 7404.00. The records of the appellants were scrutinised, it was observed that entries in the invoice-cum-gate pass No. 3429 were overwritten. Similarly invoice-cum-gate pass Nos. 509 to 513 and 1031 were cancelled after writing date and time of removal. Accordingly, the Department issued a show-cause notice to the appellants asking them to explain as to why the duty amounting to Rs. 21,28,665/- should not be demanded from them and why a penalty should not be imposed.
3. The Collector -dropped the demand of duty but imposed a penalty.
4. Ms. Reena Asthana, the learned Advocate appearing for the appellants submitted that gate passes referred to by the Department were cancelled. No clearances were made under these gate passes. Referring to Rule 173G(2)(VI), the Id. Counsel submitted that this Rule speaks of correction of any other items other than date and time of clearances that in the instant case, corrections were of date and time and therefore, the provision of Rule 173G(2)(VI) will not be applicable in their case.
5. Referring to the imposition of penalty under Rule 173Q, the Id. counsel submitted that the Department did not indicate precisely the sub-rule under which penalty was imposable on the appellants. She submitted that most likely, penalty can be imposed only under Rule 173Q(d). She submitted that for imposition of penalty, the violation of this Rule is not established and therefore, the imposition of penalty was not warranted and legal. She referred to the judgment of the Tribunal in the case of Orient Ceramics & Industries reported in 1987 (32) E.L.T. 218 and submitted that the Tribunal in para 3 of their judgment had held that there must be an intent to evade payment of duty for the purpose of imposing penalty under Rule 173Q(d). She submitted that the admitted position is that the Department had already held that there was no evasion of duty as the demand of duty has already been dropped. She, therefore, submitted that in view [of the] Tribunal judgment cited supra, there was no case made out by the Department for imposition of penalty and therefore, the order imposing penalty may be set aside.
6. Shri J. Singh, the learned JDR reiterated the findings of the lower authorities.
7. Heard the submissions of both sides, perused the evidence on record and the case-law cited by the learned Counsel. I find that in the instant case, Rule 173G(2)(vi) talks of cutting and overwriting in entries other than the date and time of removal in the gate passes, the admitted position is that the cuttings in the invoice-cum-gate pass in the instant case pertain to time and date of removal and therefore, these cuttings were not covered by the provision of Rule 173G(2)(vi). I also find that there was no intent to evade payment of duty inasmuch as the adjudicating authority had dropped the demand for duty.
8. Having regard to the above discussion, I hold that the penalty imposed on the appellants is not justified. In this view of the matter, the impugned order is set aside insofar as the imposition of penalty is concerned and the appeal is allowed. Cross-objection filed by the Department is also disposed of in the above terms.