ORDER
P.S. Bajaj, Member (J)
1. The above captioned appeals have been directed against the common Order-in-Appeal dated 28.5.2003 vide which duty of Rs. 3,04,800 with equal amount of penalty against the company appellant No. 1 and penalty of Rs. 1,00,000 against its finance controller appellant No. 2 and of Rs. 50,000 against its excise officer appellant No. 3, have been confirmed by the Commissioner (Appeals).
2. On merits, the validity of the impugned order has not been challenged. The company-appellant No. 1 has reversed the credit of entire duty amount and paid even interest thereon. The learned counsel has only prayed for setting aside of penalty on all the appellants on the ground that the company was under the
The other appellants are : 2. Praveen Kumar Agarwal; 3. Suresh Kumar Sharma.bona fide belief that credit was available to them on the imported inputs, even if the duty was paid by them from their DEPB and that the Larger Bench of the Tribunal has only recently taken the view that in such a situation the credit cannot be claimed by the assessee and it could be claimed only when the duty was paid in cash as per condition in the Exim Policy. The counsel has also placed reliance on the ratio of law laid down in the case of Mentha & Allied Products Ltd. v. CCE, Meerut, 2004 (94) ECC 181 (SC) : 2004(167) ELT 494, wherein it has been observed that where there had been different views expressed at different stages by the authorities and the Supreme Court was also not clear about the applicability of law and the authorities had been issuing classification from time to time, in such a situation neither extended period nor imposition of penalty would be justifiable. Another judgment relied upon by the counsel is Tecumseh Products India Ltd. v. CCE, Hyderabad, 2004 (94) ECC 145 (SC) : 2004 (167) ELT 498, wherein it has been also observed that in case of bona fide dispute between the parties, the imposition of penalty would not be justifiable.
3. On the other hand, the learned JDR has reiterated the correctness of the impugned order.
4. I have heard both the sides and gone through the record.
5. From the record it is quite evident that the modvat credit was wrongly availed by the company appellant No. 1. It is difficult to conclude that the company acted in a bona fide manner. The company knew the conditions of Exim Policy under which the goods were imported by them and bare reading of that policy even by a layman did not leave any doubt that the modvat credit on the imported inputs could be claimed by the importer only if the duty was paid in cash. Admittedly, no duty was paid in cash by the company-appellant No. 1. Mere getting of the entry in the DEPB at the time of clearance of imported inputs did not amount to payment of duty in cash. The company had their own excise officer who is appellant No. 3 in these appeals and it is difficult to accept that the company or the excise officer did not know the reality that the credit was not available to them on the imported inputs for having not paid duty in cash. Rather it can be safely concluded that the company deliberately with a view to cause revenue loss, availed the modvat credit wrongly in connivance of their employees appellant Nos. 2 & 3. Under these circumstances, the ratio of law laid down in the above referred cases by the Apex Court cannot be made applicable.
6. However, since the company-appellant No. 1 has already reversed and (sic, the) credit and paid interest thereon, the penalty is reduced to Rs. 1,25,000. The pre-deposit of this amount by the company appellant No. 1 shall be appropriated towards this penalty amount. Similarly, on finance controller appellant No. 2 the penalty is reduced to Rs. 50,000 and penalty on excise officer appellant No. 3, is reduced to Rs. 20,000. Except for these modifications in the penalties, the impugned order is upheld against all these appellants.
7. The appeals of the appellants accordingly stand disposed of.