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TMI Blog2011 (3) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of processed fabrics. Later it was found that 46 shipping bills, bills of lading etc. submitted by them were forged and no goods were exported. The show cause notice was issued and the case was adjudicated by the original adjudicating authority. Commissioner (Appeal) on appeal by the appellant while confirming the Order-in-original re-determined the amount recoverable as Rs. 7,52,919/-. Penalty was also reduced accordingly. 2. The appeal along with the stay application was filed by the appellants against this order. It was submitted by the appellants that the department cannot allow M/s. Avinash to retain the export rebate and recover the same by denying the deemed credit to the appellant; that the department cannot prefer the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed by the appellant in respect of the grey fabrics received by them on the ground that no manufacturing process has taken place at the appellant's premises. If the said stand of the Revenue is accepted, it will lead to the fact that no duty payment on the final product was required. However, it is seen that apart from using the said modvat credit for payment of duty, the appellants have also paid an amount of Rs. 66,533/- from the PLA account. According to the appellant no prudent man will pay duty to the government without actually receiving the grey fabrics. I agree that this fact tilts the weight of the evidence in favour of the appellant. In any case, by paying duty on the final product, the deemed credit so availed stands reversed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to M/s. Avinash Exports. 5. Further, on the question of limitation, we find that the grey fabrics were received by the appellant under the cover of challans and invoices and after processing, the clearance was done on payment of duty under the cover of Central Excise invoices and ARE-1s on making necessary entries. Necessary monthly returns also seem to have been filed. The show cause notice was issued on 4-5-2007, whereas the clearance of grey fabrics were made on 30-4-2002 and 2/3-5-2002, i.e. after five years. Therefore, invoking the extended period of limitation in this case is not justified. 6. In view of the foregoing, we set-aside the impugned order with consequential reliefs, if any, and allow the appeals. (Dictated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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