Per P.G. Chacko :

During April-June, 1994, the appellants had taken Modvat credit of Rs. 1,38,750/- on 'Fork Lifter' and similar credit of Rs. 84,011/- on 'Hardness Tester', treating both these goods as capital goods under Rule 57Q of the Central Excise Rules, 1944. Subsequently, at the instance of the Central Excise Range Officer, the party debited the amount of Rs. 1,38,750/- in their RG-23C Part-II in respect of Fork Lifter. For the remaining credit of Rs. 84,011/-, the Department issued show-cause notice to the appellants under Rule 57U read with Section 11A of the Central Excise Act. By letter dated 9.11.94, the party contested the demand in respect of Hardness Tester. In that letter, they also stated that a refund application was being submitted to the Asstt. Collector for the amount of credit of Rs. 1,38,750/- reversed in their RG-23C Part-II. By their subsequent letter dated 22.4.96, the party contested the proposal for recovery of duty on Fork Lifter. In adjudication of the dispute, the adjudicating authority rejected the assessee's defence and ordered recovery of the amount of Rs. 84,011/- and also imposed on them a penalty of Rs. 5,000/-. The appeal preferred by the