2004 (6) TMI 370 - AT - Central Excise

Summary

Issues:
1. Time-barred duty demand confirmation.
2. Legality of penalty imposition under Rule 173Q.

Analysis:
1. The appeals were directed against the order-in-appeal affirming the duty demand and penalties imposed on the appellants. The Counsel argued that the duty demand and penalties were time-barred and should be set aside. The factory premises of the appellants were visited, and a shortage of raw material involving excise duty was found. The duty amounts were debited by the company in their records. A show cause notice initially proposed penalties only, but a corrigendum later raised duty demand, which was time-barred as it was issued after the statutory period. The Tribunal held that duty demand being time-barred could not be confirmed against the appellants. Reference was made to Veera Spinning Mills case and a Board's Circular to support this ruling. The duty demand through the corrigendum was deemed time-barred, and the impugned order was set aside.

2. As the recovery of duty was time-barred, the imposition of penalties under Rule 173Q also could not be legally sustained. Consequently, the impugned order was set aside, and the appeals of the appellants were accepted with any consequential relief permissible under the law.