Judgment
1. For hearing the applicants' appeal on merits, they are required to deposit a sum of Rs. 5,05,551 towards duty and a penalty of Rs. 5 lakhs, vide order in original No. 6/C/C. Ex. Goa/93 dated 30.9.1993.2. Shri Maingi, the ld. advocate, appearing for the applicants, pleads that though they have taken over M/s. Union Storage Energy, who are alleged to be not eligible for exemption under Not. No. 175/86 during 1987-90, they cannot be fastened with penalty when there is no notice to them with regard to the penalty. Even with regard to the duty demand in respect of the clearances effected by M/s. Union Storage Energy, the demand is time barred, because the show cause notice was dated 30.4.1992 covering the period 1987 to 1990.
3. Shri Harnek Sinch (sic) the ld. JDR, on the other hand, however, points out that M/s. Union Storage Energy have not declared their manufacturing activity and claimed the benefit of exemption under Notfn. No. 175/86 and their value of clearance has exceeded the prescribed limit. Hence, the extended period is applicable.
4. Shri Maingi, however, pleads that there could not have been any intention of evading duty, because if they have paid the duty in respect of the goods, the applicants would have got hither notional credit. He, therefore, pleaded that they have got an excellent case on the ground of time bar. Moreover, these goods could not be contrued to be marketable goods.
5. After hearing both the sides, we find that in the absence of declaration with regard to the manufacturing activity, the issue of time bar is required to be gone into in detail. However, prima facie we accept that the penalty cannot imposed on them, when there is no show cause notice to this effect. Considering the arguable aspects and also the financial condition of the applicants, we direct them to furnish a Bank Guarantee for a sum of Rs. Five lakhs within a period of ten weeks from the date of receipt of this order and reporting compliance within eleven weeks, failing which their appeal is liable to be rejected. On furnishing the Bank Guarantee there shall be stay and waiver of recovery of the duty and penalty amounts.