2006 (11) TMI 447 - AT - Central Excise

Summary

Issues involved: Modvat credit availed without bringing inputs in the factory, rejection of Modvat credit, verification of documents, demand confirmation, personal penalty imposition, disallowance of credit, plea of limitation, show cause notice issuance after a period of 4.5 years, demand based on scrutiny of documents, limitation of notice issuance.

Summary:

Modvat Credit Issue:
The appellants, engaged in manufacturing Automobile Carburetors, availed Modvat credit for Zinc ingots sent to outside job workers. Revenue alleged improper procedure and initiated proceedings. Tribunal remanded the case for verification of documents showing movement of inputs, stating credit could not be denied solely for procedural violation.

Verification of Documents:
The matter was taken up for adjudication in 2004, but appellants failed to produce documents for the period 1986. As per Tribunal's directions, Modvat credit hinged on document verification, which appellants did not facilitate, leading to denial of benefit.

Plea of Limitation:
Appellants challenged the demand on the grounds of limitation, citing notice issued after 4.5 years from initial scrutiny. Citing legal precedents, the notice was deemed time-barred as per the Tribunal's decisions, resulting in the appeal being allowed with consequential relief.

Conclusion:
The notice issued after 6 months from the officers' visit was held to be barred by limitation, leading to the appeal being allowed. Demands not contested were confirmed, while the penalty was set aside.

Judgment: The notice was deemed time-barred, and the appeal was allowed with consequential relief, confirming uncontested demands but setting aside the penalty.