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2005 (10) TMI 129 - AT - Central ExciseDemand duty - Cenvat/Modvat credit - Inputs cleared from the factory, if such inputs have been manufactured in the factory - Valuation (Central Excise) - HELD THAT:- In our view, since IIL was only acting as agent for and on behalf of the IMIL, the transaction between the two was not that of a 'sale' and the principle of transfer by an agent to the principle of material procured on the principal's behalf would apply. Transaction between IIL & IMIL is that of transfer, the finding of the respondent that the same involves sale is not maintainable. We also find that the appellants have a good case on limitation to set aside the demands as there could not be an intention to avail payment of duty as both units were paying duty through PLA & were under Modvat chain. The question as to whether reversal of credit at the time of clearance on inputs as such, is sufficient compliance with the legal provisions, has been settled by two decisions of the Larger Bench of the Hon'ble Tribunal in the case of American Auto Ltd. v. CCE [1995 (6) TMI 33 - CEGAT, MADRAS-LB] and subsequently in the case of ABB v. CCE. The said decisions of the Larger Bench has in fact been followed for the period in dispute in the case of Eicher Tractors Ltd. v. CCE [2004 (5) TMI 442 - CESTAT, NEW DELHI]. Appellant thus submits that the view adopted by them is the same as that of the Larger Bench of the Hon'ble Tribunal. Assuming for the sake of argument, even if a contrary view is taken today, in such a circumstances, the larger period of limitation cannot be sustained as has been held by the Hon'ble Supreme Court in the case of Mentha and Allied Products Ltd. v. CCE [2004 (5) TMI 74 - SUPREME COURT] and in the case of Jay Prakash Industries v. CCE [2002 (11) TMI 92 - SUPREME COURT]. We find no reason to disagree with this submission & hold the bar of limitation in favour of the appellants. When duty demands cannot be confirmed, based on findings on merits of no sale taking place and on applications of the Board instruction on Valuation, when no sales on taking place, in law as also the amounts cannot be recovered due to lack of machinery provision and the same are barred by limitation, we do not find any reason to confirm liabilities of interest and penalty. We cannot upheld the duty demands and the penalties along with interest arrived at in the impugned orders. In view of our findings, orders are set aside and all appeals allowed.
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