Judgment M.M. Kumar, J. 1. This appeal filed by the Revenue under Section 35G of the Central, Excise Act, 1944 (for brevity the Act) challenges order dated 3-1-2006 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity the Tribunal) holding that no penalty could be imposed on the assessee respondent. It has been observed that the assessee-respondent had paid duty on 18-2-1999 which is sought to be reversed on the inputs utilised for the manufacture of goods on job work basis. Moreover, there is no finding concluding that the petitioner has committed any fraud or misrepresented or suppressed any facts. 2. Brief facts of the case necessary for the disposal of the controversy raised in the appeal are that M/s. Steel Strips Ltd. is engaged in the manufacture of C.R. Steel strips falling under sub-heading 72.11 of the Central Excise Tariff Act, 1985 and is alleged to have contravened the provisions of Rules 57C and 173G of the Central Excise Rules, 1944 (for brevity the Rules) inasmuch as it had not reversed the Modvat credit of Rs. 4,10,296/- for the period commencing from 12-4-1994 to 12-4-1998 on the inputs which were used in the manufacture of finished goods on job work basis as per Rule 57F(4) of the Rules. On 29-9-1998, Anti Evasion staff visited the factory premises of the assessee respondent and found that the factory was not working due to labour problem since 14-4- 1998. One Shri M.P. Singh, General Manager presented all the statutory record concerning Central Excise. The staff physically verified the stock of finished goods as well as of raw material which was found in accordance with the record. However, it was discovered that the assessee-respondent was availing Modvat Credit on different inputs and used the same in the manufacture of C, Steel strips cleared by them on job work basis under Rule 57F(4) of the Rules. According to the provisions of Rule 57C(1), credit of Central Excise duty is not permissible if final product is exempt from whole of duty of excise leviable thereon. In accordance with the Boards circular dated 25-7-1996 credit of duty-paid on common inputs is admissible when used in the manufacture of final product (exempted and dutiable) provided the said credit of duty paid on the inputs going into the exempted category of the final product is debited. In accordance with the Boards circular dated 25-7-1996 credit of duty-paid on common inputs is admissible when used in the manufacture of final product (exempted and dutiable) provided the said credit of duty paid on the inputs going into the exempted category of the final product is debited. The assessee respondent was not maintaining any separate account of use of inputs used in the finished goods manufactured on job work basis. Therefore, it was not admissible to the assessee- respondent and thus recoverable from them under Rule 57-I of the Rules. 3. On the basis of the afore-mentioned facts it was considered that the respondent had contravened the provisions of Rules 57C and 173G of the Rules because they had not reversed the modvat credit on the inputs used in the manufacture of those finished goods which were cleared by them on job work basis nor they had submitted statement to the department as required under Board Circular No. 232/66/96/Cus., dated 25-7-1996. The department invoked the provisions of extended period as envisaged by Rule 57-I(ii) of the Rules to initiate action against the assessee-respondent. A show cause notice was issued on 7/9-4-1999 for recovery adjustment of Rs. 4,10,296/- which was considered as inadmissible credit availed by the assessee-respondent in contravention of the provisions of Rule 57C of the Rules. It was also contemplated that penal action be initiated against the assessee respondent under Rules 173Q and 57-I(4) of the Rules. The Adjudicating Authority in its order-in-original came to the conclusion that the assessee respondent was liable to pay the demanded duty of Rs. 4,10,296/- under Section 11A of the Act read with Rule 57-I(ii) of the Rules along with interest as per the provisions of Rule 57(1)(5) of the Rules. Penalty of an amount equivalent to the amount of duty was also imposed. 4. On appeal filed by the assessee-respondent, the Commissioner (Appeals) deleted the penalty and vide his order dated 19-2-2004 (Annexure A/2) has concluded as under : The Appellant has also taken the plea that in the light of the judgment of Tribunal in the case of G.S.Radiators no penalty is imposable upon them. 4. On appeal filed by the assessee-respondent, the Commissioner (Appeals) deleted the penalty and vide his order dated 19-2-2004 (Annexure A/2) has concluded as under : The Appellant has also taken the plea that in the light of the judgment of Tribunal in the case of G.S.Radiators no penalty is imposable upon them. I observe that the Honble Tribunal in its judgment in the case of M/s. G.S. Radiators v. CCE, Chandigarh delivered vide Final Order No. A/232/2002 dated 30-1-2002 [2002 (147) E.L.T. 195 (Tribunal)] has held that in the absence of any allegation regarding availment of Modvat credit on the inputs by fraud, regarding availment of Modvat credit on the inputs by fraud, misrepresentation, collusion etc. with an intention to evade payment of duty no penalty is imposable under Rule 57-I(4). In the instant case there is no allegation levelled in the show cause notice that the appellant had taken credit on the impugned inputs by fraud, mis- representation, collusion etc., with an intention to evade payment of duty. Therefore, in the light of the judgment of the Honble Tribunal in the case of M/s G.S. Radiator (supra) no penalty is imposable upon them under Rule 57I(4). Accordingly penalty imposed upon the Appellants is set aside. 5. Tribunal has affirmed the afore-mentioned order and dismissed the appeal. 6. We have heard learned Counsel for the parties at a considerable length and find that there is no merit in this appeal because Rule 57-I(4) of the Rules postulates imposition of penalty equivalent to the duty in cases of fraud, wilful misstatement, collusion or suppression of facts etc. For ready reference, the afore-mentioned Rule is reproduced hereunder : Rule 57-I. Recovery of credit wrongly availed of or utilised in an irregular manner. (1) xx xx xx xx xx (2) xx xx xx xx xx (3) xx xx xx xx xx 4 Where the credit of duty paid on inputs had been taken wrongly by reason of fraud, wilful misstatement, collusion or suppression of facts, or contravention of any of the intent to evade payment of duty, the person who is liable to pay the amount equivalent to the credit disallowed as determined under clause (iii) of sub-rule (1) shall also be liable to pay a penalty equal to the credit so disallowed. 7. 7. A perusal of the afore-mentioned Rule makes it patent that recovery of credit wrongly availed of or utilised in an irregular manner could be effected in specified cases whereas penalty equivalent to the duty sought to be so recovered could be imposed where Modvat credit duty paid on inputs has been availed by the reason of fraud, wilful misstatement, collusion or suppression of facts etc. such an act has to be done with the intention to evade payment of duty. The Commissioner (Appeals) has categorically held that in the show-cause notice issued on 9-4- 1999 there was not even an allegation of fraudulent or wilful misstatement or collusion with the intention to evade duty. Once there was no allegation, there was no question of any finding in that regard. Therefore, we are not impressed with the argument that the assessee-respondents are liable to suffer the imposition of penalty by paying amount equivalent to the duty recoverable. 8. A Division Bench of this Court in the case of Commissioner of Central Excise v. M/s. Sigma Steel Tubes and another (CEA 26 of 2007 decided on 16-8-2007) [2007 (218) E.L.T. 657 (S.C.)] of which one us (M.M. Kumar, J.) is a member has the occasion to consider the provisions of Section 11A read with Section 11AC of the Act which is pari materia to the provisions of the Rule 57-I(iv) of the Rules. In that case also no finding with regard to fraud, wilful misstatement with an intention to evade duty etc. were recorded. The appeal filed by the department was dismissed. The position is similar in the case in hand. Therefore, the appeal is liable to be dismissed. 9. In view of the above, this appeal fails and the same is dismissed.