P.G. Chacko, Member (J) - (1.)After examining the records and hearing both sides, I find that the lower authorities denied Modvat credit of Rs. 22,432/ - to the assessee for the period April'01 - Jan'02 and also imposed on them a penalty of Rs. 2.35 lacs. It is also noticed that in the same assessee's case for a prior period, this Tribunal held that they had no intention to evade payment of duty vide final order No. 148/03, dated 11 -3 -2003 in Appeal No. E/57/02 [2003 (161) E.L.T. 287 (Tri -Chennai)]. In the said final order, the Tribunal held classification of the assessee's product as "Industrial Fabrics" under sub -heading 5911.90 and held that duty of excise was payable on the said product. The Tribunal however held the demand of duty to be time -barred, after finding that the assessee had no intention to evade payment of duty. For the subsequent period i.e. the period of dispute involved in the instant case, the assessee paid duty on their clearances on 25 -7 -2002, after accepting the Revenue's stand which was, later on, upheld by the Tribunal in the above final order. The lower authorities, however, denied the assessee the right to avail Modvat credit on inputs, on the ground that, during the period of dispute, they even did not have Central Excise registration. It is this decision that is under challenge now.
(2.)Ld. Consultant submits that the Tribunal has allowed Modvat credit in other cases in similar circumstances. In any case, according to the consultant, the penalty imposed on the appellants cannot be sustained in the above facts and circumstances.
(3.)I have heard ld. DR also.