2005 (12) TMI 138 - AT - Central Excise

Summary

Issues involved: The issue involves the question of demand of duty from the respondents after a considerable period of time of investigation, with the Commissioner (Appeals) holding the duty as time-barred, leading to an appeal by the Revenue.

Summary:
The Appellate Tribunal CESTAT, New Delhi considered a case where officers found shortages in finished goods during a stock-taking exercise at the respondents' factory on 28-1-2000. Despite this, no action was taken until 16-4-2002 when a show cause notice was issued for duty demand. The Commissioner (Appeals) allowed the respondents' appeal on the grounds of time-bar, which the Revenue appealed against. The Tribunal noted that the Partner had admitted the shortages on the same day as the inspection, and no further investigation took place until the show cause notice was issued. Citing a precedent, the Tribunal emphasized that the delay in issuing the notice without continued investigation rendered the demand time-barred. As the investigation was completed in 2000 and the notice issued in 2002 without proper explanation for the delay, the Tribunal dismissed the Revenue's appeal.

This judgment highlights the importance of timely action and continued investigation in matters of duty demand, emphasizing that delays without valid reasons can render the demand time-barred, as per legal precedents and the Central Excises Act, 1944.