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2006 (8) TMI 378 - AT - Central ExciseDenial of Modvat credit - Not utilized the inputs in the manufacturing of their final products - Demand of duty - Limitation - Shortage in inputs - Demand - Penalty imposed on the co-noticees - HELD THAT:- The demand of duty on the appellants in Onida Saka Ltd. for the shortage of the inputs which were found during the visit of the officers, I find that the statements were recorded of the concerned people in the factory as on 14th January 1999 and show cause notice was issued to them on 27-3-03 i.e. almost after four years. It is a settled law that a show cause notice which is issued after two years then it is non-est as affirmed by the Hon’ble Supreme Court in the case of Gammon India Ltd.[2002 (5) TMI 848 - SC ORDER] in an appeal against order of the Tribunal [1999 (5) TMI 436 - CEGAT, MUMBAI]. In view of this, the demand of the duty in respect of inputs found short in this case is hopelessly time barred and the confirmation thereof is set aside. The issue before the Division Bench of the Tribunal was in respect of the one of the co-noticee i.e. Samtel Colour Ltd. Respectfully following the said order of the Division Bench, not found any merit in the appeals of revenue as regards the dropping of the proceedings by the Commissioner (Appeals) on this account. As regards, the Revenue’s appeals against the setting aside the penalties by the Commissioner (Appeal) on other people, I find that the penalty has been imposed under the provisions of Rule 209A of the Central Excise Rules, 1944. The Commissioner (Appeal) has correctly came to the conclusion that provisions of Rule 209A are not applicable in this case to the limited companies and hence the order setting aside the penalties under Rule 209A is correct and does not require any interference. Accordingly, the appeals filed by the appellant i.e. Monika Electronics Limited - Appeal and Onida Saka Ltd.- Appeal are allowed with consequential relief, if any and appeal filed by the revenue are rejected.
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