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2005 (8) TMI 494 - AT - Central ExciseImposition of Penalty - Demand - extended period of limitation under the proviso to Section 11A(1) - Valuation of grey fabric - HELD THAT:- The facility to go behind the declaration and start an inquiry into the declarations made under notification 27/92 was required to be done by the proper officers, at the relevant time of attending to the RT12 assessments as filed. The present show cause notice, has been issued only on 5-12-2000, after a full fledged enquiry that started somewhere on 25-11-1998. Search of Nangalia Groups and others were caused. If the Departmental Officers, with all the resources of man power and backing of law to conduct an enquiry, took almost 2 years to come to a prima facie conclusion of under declared values by the traders, it is unfair to visit the assessee, to have knowledge, and having to being knowingly to have declared lower prices as declared to have vide notification 27/92 by the Trader when in the milieu of the law, MMF processing trades as understood then and commercial practice at that time was otherwise i.e. during the relevant period 1997-98 to 15-12-1998. We would therefore find no reasons or find ingredients exist to uphold the invocation of the larger period of demand in the facts herein. Duty demands and liabilities to confiscation therefore cannot be upheld. The plea on behalf of Nangellia group, made by ld. Advocate Sh. Bulachandani, that they are manufacturer and weavers of fabrics and the prime quality of Gray fabrics were sold and the declarations made for the fabrics sent for processing by them was more than the costing thereof and being defective not of saleable standard the valuation of such of Gray cannot be of comparable fabrics being sold in the market as of prime quality has force. In any case, the valuation is being composed with market sale price of Gray fabrics, without any evidence of similar quality being on record. The traders were required to and gave the cost plus declaration. Mixing of lots and other commercial consideration went in the declaration made. The evidence similar grey quality receipts of M/s. Rupa was not on record. The proposed valuations cannot upheld. Different qualities of Gray are a commercial reality. That cannot be ignored by Revenue. We find force in the arguments and the grounds taken by the appellants in this appeal. No demands on merits can be arrived at. We find no mens rea or knowing concert with any alleged evasion and dealing with excisable goods knowingly that such goods excluded to confiscate is on record. We find no reason to visit them with Rule 209A penalties as arrived. The imposition of penalty under Rule 173Q and Section 11AC as arrived cannot be upheld on facts herein and also the position in law not upholding of such ‘joint read with’ penalties, following the decision in case of Jay Yuhshin Ltd. [2001 (8) TMI 234 - CEGAT, NEW DELHI]; Since no duty demand and or penalties or confiscation are being arrived at, the penalties under Rule 209A are not upheld in all cases as arrived in the impugned order. Thus, we find no merits to uphold the order in these appeals. The order is set aside and the appeals allowed.
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