TMI Blog2016 (1) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Appeal No. E/250/07 - A/85112/16/EB - Dated:- 4-12-2015 - Mr. M.V. Ravindran, Member (Judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieve in the existence of the facts in issue. He would submit that the responsible personnel of the respondent had admitted that there was clandestine removal. 5. Learned Counsel on the other hand would draw our attention to the facts of the case, that show cause notice itself accepts that there cannot be any demand of duty as allegation of clandestine removal was for the period 1995 - 96 to 1998 - 99. He would draw our attention to the order in original and submit that the adjudicating authority has clearly recorded that the judgement of the Hon ble Supreme Court in the case of HMM Ltd - 1995 (76) ELT 497 will be applicable as the Department is not able to sustain the demand in show cause notice on the point of limitation. He would also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 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. We also find that the larger bench in the case of Godrej Soaps (supra) held as under echoing the ratio of Apex Court:- 6.In the light of above, we are of the view that when the demand gets dropped on any account, penal provisions cannot sur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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