JUDGMENT
C.N.B. Nair
1. The appeal relates to the denial of modvat credit of about Rs.3.60 lakhs and imposition of penalty of Rs.5000/- on the appellants. The credit related to duty paid on cement and steel purchased by the appellants and use in the manufacture of factory building.
2. During the argument of the case, Learned Counsel representing the appellants stated that, apart from the merits of the case, an amount of Rs.53,528/- could not be recovered, as the demand in respect of that amount had become time barred. He pointed out that credited of duty in respect of that amount was taken on 21.10.94, while the show cause notice was issued only on 4.5.95. During taking of the credit, the Rule 57U(1) stipulated that show cause notice for recovery should be issued within six months from the date of taking of credit. Ld. Counsel contended that, six months having expired by April’95, the demand could not have been raised beyond that period. In this connection, he drew our attention specifically to the amendment in Rule 57U (1) with effect from 16/3/95, whereunder the provision regarding time limit was changed from six months from the date of taking of credit to six months from the date of filing of RT-12 returns. Ld. Counsel also drew our attention, in this context, to the decisions of the Tribunal in the case of CCE Chandigarh v. INDIAN SPUN PIPE COMPANY reported in 1999 (113) ELT 258; RADIANT INDUSTRIES LTD. v. CCE CALCUTTA, 1999 (113) ELT 892 and SWIL Ltd v. CCE (A) Calcutta, 1999 (109) ELT 193.
3. With regard to penalty imposed, Ld.Counsel submitted that the same was unwarranted in the present case, as credit was available under the rules at that time in respect of “plant” and in the ordinary meaning of the word “plant”, building also would be covered, thus justified taking of credit on building material on account of, if at all, an incorrect understanding of law. He also submitted that during the relevant period, other assessees were also taking credit in respect of construction material. He also pointed out that departmental authorities had been informed about taking of credit on construction material.
4. Heard Ld.SDR who submitted that contention raised with regard to time limit has no legal basis. He took us specifically to the finding on this point contained in para-3 of the Order-in-Original of the Asst. Commissioner. He pointed out that in respect of change of time limit for raising demands, the larger bench of the Tribunal in the case ATMA STEELS PVT.LTD & Others v. CCE Chandigarh, 1984 (17) ELT 331 had held that the time as stipulated in the amended provision would be attracted. He also submitted that in face of the full bench of the Tribunal decision in the ATMA STEEL case, the single bench and division bench decisions of the Tribunal cannot be followed.
5. We find from the facts of the case that amendment of the rule took place w.e.f. 16/3/95, i.e. before the demand had become time barred. Therefore, this is not a case where a dead claim is sought to be revived through revised time limit. We, therefore, are not in agreement with the Ld.Counsel’s submission with regard to time bar for demand of about Rs.53,000/-. However, with regard to penalty, we are of the considered opinion that same is not justified in the facts of the present case in as much as the assessee had specifically informed the jurisdictional departmental authority that credit was being taken n respect of cement and steel.
6. In view of our findings above, the demands are confirmed and penalty imposed is set aside. The impugned order is modified to this extent and the appeal is disposed of in the abvoe terms.
(Dictated and pronounced in open Court)