Judgment :- By consent of both parties, the main Writ Petition itself is taken up for final hearing. I have heard Mr. P.S. Raman, learned Counsel for the petitioner and Mr. K. Jayachandran, learned Additional Central Government Standing Counsel for the respondents. 2.The above Writ Petition has been filed for the following relief : "... to issue a Writ ofCertiorarified Mandamusor any other appropriate Writ order or direction in the nature of a Writ to call for the records of the third respondent Tribunal in its Order No. 416/95/E/Stay/169/95 in Appeal No. E/232/95 dated 8-6-1995 confirming the demand of Rs. 2 lakhs as penalty and quash the same and consequently direct the respondents to refund the sum of Rs. 2 lakhs paid by the petitioner as penalty under Rule 173Q." 3.The petitioner herein are manufacturing among other excisable goods, PVC resin, falling under Chapter No. 3904 of Central Excise Tariff Act, 1985, for which major raw material is Vinyl Chloride Monomer (VCM) which is imported by the petitioner right from its inception. The said Vinyl Chloride Monomer is levied with countervailing duty (CVD) from June 1993. VCM, which is imported is stored in the petitioners own storage tank near Tuticorin port from where it is decanted. The said storage facility of petitioner is 28 kilo metres away from the factory at Sahupuram. The entire VCM which is decanted and stored in the storage tank near Tuticorin Port is periodically brought to factory by company owned tanker lorries to the factory at Sahupuram. Since the final product is dutiable, the petitioner avails Modvat benefit on the countervailing duty paid on the said VCM based on the Bill of Entry. The petitioners have complied with the rules of Modvat by filing declaration under Rule 57(G) which has been duly acknowledged by the Assistant Collector of Central Excise, Tuticorin Division. The entire countervailing duty is paid at the entry point i.e., at the time of decanting from the ship and stored in our storage tank near Tuticorin Port. Based on the Bill of Entry, the petitioner availed Modvat from the date on which countervailing duty was levied. Till November 1993, the Department without any dispute were accepting the Bill of Entries and availment of Modvat benefit by defacing the said Bills of Entry. Based on the Bill of Entry, the petitioner availed Modvat from the date on which countervailing duty was levied. Till November 1993, the Department without any dispute were accepting the Bill of Entries and availment of Modvat benefit by defacing the said Bills of Entry. From December 1993, Superintendent of Central Excise, Tiruchendur started refusing to deface the Bill of Entry and insisted on supplementary gate passes for the purpose of availment of Modvat benefit as VCM stored in the Company's storage tank at Turicorin is brought piecemeal to the factory. The petitioners contended that as per Rule 57G(2), if at all, subsidiary gate pass is required, it is only for gate pass or AR-I and not for Bill of Entry as duty has been paid in one lump sum and entire quantity is stored in company's own storage tank and was brought and consumed in the petitioners factory which is not disputed. The petitioner also contended that since it is not disputed that the entire VCM is consumed in the manufacture of PVC resin and petitioner have complied with all rules of Modvat for the purpose of availment, they are rightly eligible for Modvat benefit based on the Bill of Entry. 4.During the pendency of correspondence on this issue Assistant Collector of Central Excise, Tuticorin Division, issued a show cause notice dated 16-6-1994 followed it up with three more show cause notices on identical grounds dated 27-6-1994, 4-7-1994 and 26-7-1994 respectively. The petitioners filed detailed identical replies, and contended that as there was no whisper in the show cause notice and it is not disputed that substantial rules of Modvat have been complied with by the petitioner, such as filing of declaration, payment of countervailing duty at entry point, entire quantity represented in the relevant Bills of Entry being consumed in the manufacture of PVC resin on which excise duty is paid and property accounted etc., it can utmost be viewed as a procedural lapse, if at all it is so. While so, the Assistant Collector has passed an Order-in-Original No. 2/95, dated 31-1-1995 holdinginter aliathat there has been a contravention of Rule 57G(2) and, therefore, while admitting that the petitioners are rightly eligible for CVD paid on VCM, the said authority dropped the demand but levied a huge penalty of Rs. 42, 00, 000/- under Rule 173Q and Rs. 32, 000/- under Rule 226. 42, 00, 000/- under Rule 173Q and Rs. 32, 000/- under Rule 226. Aggrieved by the order of the 1st respondent, the petitioner herein had filed a statutory appeal before the second respondent viz., the Collector of Customs & Excise (Appeals), Trichy being Appeal No. 85/95 Madurai wherein the petitioner herein had urgedinter aliathat the imposition of penalty under Rules 173Q and 226 were unwarranted and that for a mere procedural lapse, a penalty of Rs. 42 lakhs under Rule 173Q was clearly disproportionate. The penalty of Rs. 32, 000/- imposed under Rule 226 was also totally without jurisdiction since maximum fine contemplated under the provisions was only Rs. 2, 000/-. By his order in Appeal No. 11/95 dated 27-3-1995, the 2nd respondent has reduced the penalty of Rs. 32, 000/- to Rs. 2, 000/- and the penalty of Rs. 42 lakhs imposed under Rule 173Q was reduced to Rs. 2 lakhs. The second respondent had held that the average period of utilisation of goods was a fortnight and that might have been some marginal benefit by obtaining Modvat credit in advance to the extent of 14 days. This was computed by the appellate authority to be Rs. 1.73 lakhs, the method of computation being as such unclear. Aggrieved by the above order confirming the penalty to the extent of Rs. 2 lakhs under Rule 173Q the petitioner herein preferred an appeal to the 3rd respondent Tribunal being Excise Appeal No. 232/95 together with an application under Section 35(F) seeking for waiver of pre-deposit. The Tribunal disposed of the main appeal with the said application and dismissed the appeal and confirmed the penalty of Rs. 2 lakhs even after holding that there was no totalbona fideon the part of the petitioner and if at all there was a mistake arising out of a misunderstanding of procedural rule. 5.Aggrieved by the said order, the petitioner has filed the above Writ Petition. Before proceeding further, to consider the contentions of Mr. P.S. Raman, learned Counsel for the petitioner, it is useful to extract Para 5 of the order of the 3rd respondent dated 8-6-1995, for the purpose of disposal of this Writ Petition : "We observe that the appellants have taken Modvat credit in respect of the goods which were to be received in the factory. P.S. Raman, learned Counsel for the petitioner, it is useful to extract Para 5 of the order of the 3rd respondent dated 8-6-1995, for the purpose of disposal of this Writ Petition : "We observe that the appellants have taken Modvat credit in respect of the goods which were to be received in the factory. The learned Collector (Appeals) has taken note of this irregularity in availing of the Modvat credit which was not available to them under law. It appears that there was some misunderstanding in the minds of the appellants in regard to the stage at which Modvat credit could have been taken. However, inasmuch as the penalty levied is to the extent to take care of the interest accrued to the appellants, and that the appellants are liable to penalty under Rules 173Q and 226 of the Central Excise Rules, 1944 formation of rule as held by the lower appellate authority, we hold no further reduction in penalty is called for. We also take note of the plea of the appellants that the appellants are paying duty to the tune of Rs. 35 crores per annum to the Government and there was no need for the appellants to have wrongly availed of the Modvat credit nor was there any compulsion on their part in this regard and the mistake was more on account of mis-understanding and can be considered asbona fide." It is seen from the above finding that the Tribunal has taken note of the plea of the petitioner that they are paying duty to the tune of Rs. 35 crores every year and there was no need for the petitioner to have wrongly availed of Modvat credit nor was there any compulsion on their part in this regard and mistake wasmore on account of mis-understandingand can be considered asbona fide. Mr. Raman contended that the petitioner has been assessed to Excise Duty for many decades and pays over a sum of Rs. 120 crores by way of Customs duty and Rs. 35 crores by way of Central Excise every year and has till date not suffered a penalty in any matter and, therefore, the present confirmation of penalty of Rs. 2 lakhs causes the petitioner company with very grave stigma in its performance of its duties as a law abiding corporate entity. 120 crores by way of Customs duty and Rs. 35 crores by way of Central Excise every year and has till date not suffered a penalty in any matter and, therefore, the present confirmation of penalty of Rs. 2 lakhs causes the petitioner company with very grave stigma in its performance of its duties as a law abiding corporate entity. Moreover thebona fidesof the petitioner having been clearly established and the original adjudicating authority itself having held that there was a real and genuine difficulty in implementing the procedure in the peculiar facts of the case, there was no warrant at all to impose any penalty under Rule 173Q which is in the nature of a penal provision intended to be used against tax evasion and not to be used against thebona fideassessees. In the instant case the provisions of Rule 173Q are being used to recover an alleged interest loss in the guise of a penalty which is clearly in excess of the jurisdiction and the imposition of the penalty isultra viresthe status and the rules made thereunder. As pointed out by Mr. Raman, learned Counsel for the petitioner the computation of a possible financial gain by the petitioner in the availment of Modvat is erroneous since Modvat was being availed in respect of CVD which has already been paid in full to the Customs Department, at the time of clearance of the import of raw material. The Tribunal in having confirmed the imposition of penalty by the lower authority has while upholding thebona fidesstill caused a stigma on the company and hence, the company is advised to seek the equitable and supervisory jurisdiction of this court. It is settled law as already pointed out that for mere procedural lapse, no penalty is leviable if there is no intention to evade duty. The Tribunal having held that the attempt on the part of the petitioner for having availed Modvat credit may be a mistake which was more on account of mis-understanding and, therefore, can be consideredbona fide. Having held so, the Tribunal the 3rd respondent herein ought not have confirmed the penalty imposed by the respondents 1 and 2. However, this court in exercising its jurisdiction under Article 226 of the Constitution of India has got some restrictions in interfering with the factual findings like this. Having held so, the Tribunal the 3rd respondent herein ought not have confirmed the penalty imposed by the respondents 1 and 2. However, this court in exercising its jurisdiction under Article 226 of the Constitution of India has got some restrictions in interfering with the factual findings like this. Therefore, in the interest of justice and fair play, I deem it proper to remit this matter to the concerned authority viz., the Assistant Collector of Central Excise, Tuticorin Division, Turicorin and direct him to reconsider the matter on the basis of the arguments advanced by the learned Counsel for the petitioner and pass appropriate orders considering whether penalty at all is leviable in the peculiar circumstances of this case and also in the light of the clear factual findings rendered by the 2nd and 3rd respondents. 6.In the result, the Writ Petition is disposed of with the above directions. No costs.