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2016 (1) TMI 832 - AT - Central ExcisePenalty imposed on demand not sustainable - clandestine removal of the goods which were in contravention of various Central Excise Rules - Held that:- The show cause notice issued to the respondents clearly and unequivocally accepts the fact that demand of duty liability cannot be sustained as the demand for duty in show cause notice is beyond the period of 5 years. Provisions of section 11 A of the Central Excise act 1944, mandates the Department to recover duty within a period of 5 years from the date of issuance of the show cause notice. There re no provisions to demand any duty beyond the period of 5 years from the date of show cause notice. The adjudicating authority has correctly followed the law and has held that when the demand is not sustainable on the question of limitation, penalties can be imposed on the assessee under the Central Excise Rules 1944. We do not find any merits in the arguments put forth by the learned departmental representative. The judgement of Hon’ble Supreme Court in the case of HMM Ltd [1995 (1) TMI 70 - SUPREME COURT OF INDIA ] will be directly applicable wherein their Lordships have clearly settled the law, that question of penalty would arise only if the Department is able to sustain its demand. - Decided in favour of assessee.
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