2006 (11) TMI 443 - AT - Central Excise

Summary

Issues involved:
The Revenue and the Party are aggrieved with Order-in-Appeal No. 708/2002 confirming demands for the period 1995-96 to 1997-98 in terms of the show cause notice invoking a larger period.

Details of the judgment:
- The Revenue seeks imposition of penalty under Section 11AC of the Act for contravention during the period, emphasizing the time lapse between the Mahazar recording and the show cause notice issuance.
- The appellants presented various evidences to demonstrate that they were not only manufacturing and clearing furniture but also other items like doors, shutters, window frames, ventilators, etc. These evidences were not adequately examined by the Commissioner (A).
- Citing the Nizam Sugar Factory case, the appellants argued that the demands are time-barred as the Revenue failed to produce evidence related to raw materials, manufacturing, and supplies, and did not consider the counter-evidence provided by the appellants.
- The Commissioner (A) did not properly quantify the amount of furniture clandestinely removed, and there was a lack of independent corroborative evidence to support the allegations of duty evasion.
- The Tribunal found that the demands on the allegation of clandestine removal lacked sufficient evidence and were set aside.
- The show cause notice was issued after an inordinate delay of 848 days, which, according to legal precedents, rendered the demands time-barred.
- As Section 11AC was not in force during the period of the offense, the department's prayer for penalty enhancement was rejected since the appellants succeeded on the merits.

Conclusion:
The party's appeal was allowed due to the time-barred nature of the demands, while the department's appeal for penalty enhancement was rejected.