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2017 (5) TMI 1373 - CESTAT ALLAHABADCENVAT credit - diverted billets/slabs - penalty u/r 57AH(2) read with Section 173Q of CER, 1944 and Rule 13 to of CCR, 2001 - clandestine removal of billets - Held that: - the inputs in questions were procured from SAIL and duty was paid. Both HML & MSL were independently entitled to purchase the inputs and avail credit on the same. There was no apparent gain for HML to purchase the input and avail credit and divert the said duty paid inputs to MSL. The Revenue failed to demonstrate any benefit accruing to HML or MSL, due to indulgence in such practices. Admittedly both the companies are under the same management and are closely held companies. Clandestine manufacture and removal of 7,651.817 MT of MS Strips - Held that: - The basis for the demand raised appears illogical, as no apparent benefits is shown to have accrued to either of the appellants. The sending of goods on job work by M/s HML to M/s MSL was duly intimated to Revenue vide letter dated 02/01/2002. A confirmation letter dated 18/03/2002 was issued by Assistant Commissioner, to this fact (brought on record by appellants). Further appellants have led evidence that Mr. S. K. Tyagi had retracted his statement within a few days vide letters dated 17/04/2002 & 22/04/2002 addressed to the D. G. of DGCEI, New Delhi. The contention of Revenue that factory of M/s MSL was running for 7 more hours, than declared, is untenable, being based only on the basis of statements of some employee. The same does not stand in view of order dated 18/03/1998 passed by commissioner of Central Excise, Kanpur, determining the Annual Capacity of production at 17 MT per day. Further under the facts and circumstances, extended period of limitation is not invokable. The impugned order is also bad and unsustainable for non-compliance of the provisions of Section 9 D of the Act. The case of Revenue is not proved and the allegations are sham and illusory and Show Cause Notice is not maintainable - appeal allowed - decided in favor of assessee.
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