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2006 (2) TMI 364 - AT - Central ExciseDemand notice u/s 11 - Period of limitation - seizure of goods - Confiscation - Show cause notice issued - Suppression of facts - Imposition of Penalty - HELD THAT:- The decision of the Hon’ble Supreme Court in the case of Jaiprakash [2002 (11) TMI 92 - SUPREME COURT] is applicable in the instant case as there were conflicting, on the issue and the demand notice dt. 4-12-1989 was clearly issued beyond 6 months of the relevant period which was May, 1986 to January, 1989. Hence, we are of the view that the demand of an amount of Rs. 3,55,81,610.71 is hit by limitation. We also observe that the jurisdictional authorities did come to know of the activities of the appellants during their visit on 12-1-1988 and therefore, they could have issued demands within the normal period of limitation at least for the period 6 months prior to that date till January, 1989 which does not appear to have been done. Thus, it is necessary that the departmental authorities issue demands within the normal period of limitation to protect the revenue interest particularly in cases where there are contrary decisions of Tribunal/Court. As regards the other Show Cause Notice dt. 18-7-1988, We are of the view that in respect of seized goods, there is no requirement of confirmation of a separate demand notice u/s 11 of the Central Excise Act, 1944 and that in the event of such goods being confiscated, the duty amount automatically becomes payable on redemption of the same. In other words, on confiscated goods redemption fine and duty must be paid before the same can be redeemed. Hence, we find no infirmity in the order of the adjudicating Commissioner imposing redemption fine of Rs. 20 Lakhs and directing payment of the duty of Rs. 16,11,030.19/-. Penalty - The learned Advocate for the appellants has contested the penalty amount on two grounds. He has submitted that since the excisability of goods was in doubt on account of conflicting decisions and the appellants had a bona fide relief regarding non-excisability of the same, no penalty can be imposed. He also argues that since the earlier order in respect of the Show Cause Notice dated 4-1-1989 imposed a penalty of Rs. 10 lakhs against which the appellants filed a writ petition in the Hon’ble Patna High Court and the case was remanded for re-decision, no higher penalty can be imposed on de novo adjudication when the department has not gone in appeal against the same. After considering all aspects of the case, and particularly taking into account the fact that on excisability of the impugned goods, there were divergent decisions of the Tribunal/Court, we do not think it to be a fit case for imposition of penalty. Hence, we set aside the same.
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