ORDER
P.S. Bajaj, Member (J)
1. In this appeal, the challenge has been made to the impugned order-in-appeal vide which the Commissioner (Appeals) has affirmed the order-in-original of the adjudicating authority who confirmed the duty of Rs. 1,51,67,478/- with penalty of Rs. 15 lakhs, against the appellants.
2. The duty has been confirmed for denying them the Modvat credit on the capital goods under Rule 57Q for having removed the same outside the factory without valid permission after availing the Modvat credit during the period December, 1999.
3. The learned Counsel has contended that the capital goods Moulds and Dies (30 in number), detailed at Serial Nos. 1 to 30 in Annexure 1(B) to the show cause notice, were removed from the factory with the permission of the competent authority. He has also contended that even after the expiry of the period, the appellants sought extension of time and their prayer was never rejected by the competent authority. He has further contended that regarding the goods detailed at Serial Nos. 31 to 33 of the above said Annexure, permission was granted to the appellants. Therefore, no duty could be confirmed against the appellants and the impugned order deserves to be set aside.
4. On the other hand, the learned SDR, has reiterated the correctness of the impugned order.
5. We have heard both sides and gone through the record. From the record, we find that permission was no doubt granted to the appellants for the removal of the goods (detailed at Serial Nos. 1 to 30) by the competent authority, out of the factory, but the same was valid upto 8-4-1999 which was, however, further extended upto 31-12-1999. But thereafter, neither extension was sought by the appellants by making a proper representation not it was granted by the competent authority. Therefore, the appellants were required to bring back these goods to the factory on the expiry of the period, but they failed to do so. The contention of the learned Counsel that extension of time was applied through a letter dated 29-12-1999 by the appellants along with permission for the remaining goods, detailed at Serial Nos. 31 to 33 of the Annexure, for removing out of the factory and this request was never rejected by the competent authority, is wholly mis-conceived and cannot be accepted. We have gone through that letter and find that it does not speak of any prayer of the appellants for the extension of time. No permission for removing of the other goods, referred to above, was also granted to the appellants. It rather appears from the perusal of that letter that the appellants had even removed these goods out of the factory to another premises of M/s. Sun Steering Wheels Ltd. without any order of the competent authority.
7. Before removing the goods from out of the factory, the appellants had availed the Modvat credit thereon. But having failed to bring back to the goods to the factory after the expiry of the time granted to them, for keeping the goods out of the factory and having also removed some goods, detailed above, out of the factory without permission, in our view, the duty demand has been rightly confirmed against them after disallowing the Modvat credit. We do not find any illegality in the impugned order in this regard.
8. The contention of the learned Counsel that the goods had been now brought back by the appellants to the factory and as such they are entitled to the Modvat credit, cannot be accepted as their re-entitlement of the credit on that score, is not an issue before us. The appellants may seek this relief by making proper prayer before the competent authority who will be at liberty to decide it, as per law. But, in the present appeal, this aspect cannot be taken into account for setting aside the duty demand against them. However, keeping in view the facts and circumstances of the case, the penalty imposed on the appellants deserves to be reduced and the same is reduced to Rs. 1 lakh (rupee one lakh only).
9. In view of the discussion made above, except for the modification in the penalty amount, the impugned order is upheld. The appeal of the appellants stands disposed of accordingly.
(Operative part of this order was pronounced in the open Court on 28-2-2005)