Full Judgment
2. Show cause notice dated 17-11-1994 was issued to the appellants proposing denial of Modvat credit of the above mentioned amount on the ground that credit was availed on the strength of a debit note which is not a valid duty paying document for Modvat purposes. The notice was adjudicated by the Assistant Commissioner who confirmed the demand and imposed penalty. He, however, did not record any finding on the plea raised by the appellants that the demand was barred by limitation as the show cause notice issued on 17-11-1994, despatched subsequently and received later by the appellants was issued beyond the period of six months from the date of taking credit (which is relevant for the purpose of Rule 57-I) - credit was taken on 17-5-1994.
3. The Commissioner (Appeals), however, considered the plea of limitation, in addition to the ground that the document on which credit was taken was not valid for Modvat purposes and he held that there was nothing to show the date of taking credit and therefore the appellants were not able to establish that the notice was barred by limitation. He therefore dismissed appeal by upholding the order of the adjudicating authority. Hence this appeal.
4. On hearing both sides and noting that the date of taking credit is shown clearly in the show cause notice as 17-5-1994, and further noting the language of Rule 57-I which provides that the period of six months is to be computed from the date of taking credit (this was the rule as it stood in 1994 although subsequently amended), we find substance in the plea of appellants and hence we hold that the demand is barred by limitation, set aside the impugned order and allow the appeal.