TMI Blog2019 (7) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances, demand of duty in terms of proviso to section 3 of Central Excise Act cannot be upheld - demand to the extent exceeding the demand of duty forgone on procurement of said goods is set aside. Penalty is consequently, revised under section 11AC to the re-quantified duty. Invocation of penalty u/r 26 of CER - HELD THAT:- In the instant case there was diversion of significant quantity of material procured duty free under CT-3. Joy M. Godiwala was director of the unit and he had also admitted in his statement that all day to day activities of the unit including work related to central excise and customs was carried out as per his direction and instructions. In these circumstances, there is significant force to invoke rule 26 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of Tribunal in the following cases: CCE vs Suresh Synthetics 2007 (216) ELT 662 (SC) CC vs Kesar Marble Granites 2012 (278) ELT 42 (Kar.) DGP Hinoday Industries Ltd. vs CCE 2017 (349) ELT 503 2.1 He also argued that in the instant case, the SCN is totally time barred as the Central Excise Officers visited the factory premises on 24.06.2003 and on the same day the statement of director was recorded. He pointed out that under such circumstances issuance of SCN on 12.02.2008 is clearly beyond normal period of limitation. He argued that in the current circumstances, section 11AC and Rule 25 cannot be invoked as the goods were not manufactured by appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case. 5. We find that Ld. Counsel has invoked limitation on the strength of fact that the revenue was aware of the non-accountal of raw material on the date of visit and SCN was issued much later. The impugned order rightly relied on the decision of Hon ble High Court of Gujarat in the case of Neminath Fabrics Pvt. Ltd. 2010 (256) ELT 369 (Guj.) dated 22.04.2010 wherein it was held that mere knowledge of revenue is not sufficient if the factors necessary for invoking proviso to section 11A are otherwise present. In view of above argument relating to limitation is not acceptable. Ld. Counsel has also raised issue that section 11A and therefore Section 11AC, Rule 25 of Central Excise Rules cannot be invoked as the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of one year from the date of procurement thereof or within such extended period as the Assistant Commissioner of Customs or Central Excise may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow: 5.2 In the instant case, the appellant are failed to account for a certain quantity of raw material procured by them and consequently, they are liable to pay duty. It is seen that the proviso to section 3 applies only to goods manufactured or produced by a 100% EOU. It therefore cannot be applied to the said goods which were clearly not produced by the appellant. In these circumstances, demand of duty in terms of proviso to section 3 of Central Excise Act cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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