Per Shri P.C. Jain :

Short question involved in this matter is whether the penalties imposed for violation of Rule 57F by not intimating the Assistant Collector and taking dated acknowledgment thereof is correct or not in the facts and circumstances of the case.

2. Ld. advocate, Shri B. Saha submits very fairly and correctly that Rule 57F does provide for intimating the Assistant Collector about the clearance of the inputs on which modvat credit has been taken as such i.e. after intimating the Assistant Collector and taking dated acknowledgment thereof. He also admits very fairly that it was not done by the appellants herein. Nevertheless, he submits that it is admitted to the authorities below that the lapse is only of a procedural nature. There was no intention to deliberately violate the provisions of Rule 57F which was merely an ignorance of the procedural details to be followed by the appellants in this respect. Keeping in view these circumstances, ld. advocate prays for waiver of penalty in as much as he submits there are judgements of the Supreme Court and of the Tribunal namely, (i) AIR 1965 S.C. 513 (Hindustan Steel Ltd. Vs. State of Orissa], (ii) 1987 (31) ELT 375 (T) [K.R. Steel Union Pvt. Ltd. Vs. C.C.E., Calcutta], that penalty should not be imposed on a person unless it has been a contumacious conduct or of deliberate nature in defiance in law. He, therefore, prays for waiver of penalty and in any case reducing the penalty subsequently.

3. Opposing the contention, ld. JDR, Shri S.N. Ghosh submits that the Apex Court in the case of Gujarat Travancore Agencies [1989 (42) ELT 350 (S.C.)] has held that mens-rea is not relevant if there is a default in compliance with any provisions of law. One similar line, ld. JDR also relies on another Supreme Court's judgement in the case of Pine Chemicals [1993 (67) ELT 25].

4. I have carefully considered the pleas advanced from both sides. I have gone through the provisions of Rule 57F gist of which has already been set out above in as much there is no denial that the said Rule does provide for intimating the Assistant Collector and taking an acknowledgment of such intimation before the clearance of the modvated inputs as such. I am, therefore, of the view, that the appellants were required to follow the provisions of Rule 57F. Other plea of the ld. advocate is that this was due to ignorance of the appellants cannot be accepted because I find that the appellants had been a holder of licence/registration certificate of the Central Excise for a number of years. Nevertheless, I find some force in his pleas that this is a first instance of this type and, therefore, they should mitigate their offence. Consequently, having regard to the over-all facts and circumstances of the case, while upholding the liability of the appellants to penalty in this case for violation of Rule 57F, I reduce the penalty to Rs. 500/-.

4.2 I also observe that the reliance placed by the ld. advocate on the two judgements - one of the Apex Court and another of the Tribunal is not correct in the facts and circumstances in those cases are quite different from the facts and circumstances of this case. Accordingly, I reject the appeal except for modification in amount of penalty as mentioned above.