Judgment:
1. By the captioned appeal, the appellants have pressed the time-bar issue only.
2. The facts of the case are that the appellants are engaged in the manufacture of parts and accessories of machines and appliances. They purchased 7130 Kgs. of C. R. strips falling under Tariff Heading 7211.51 under the cover of endorsed Invoice/Challan and took credit of input duty under the modvat scheme on the strength of these invoices.
The department alleged that invoices were issued by an unregistered dealer and therefore, the invoices were not the prescribed documents for taking Modvat credit under Rule 57A read with Rule 57G of the Central Excise Rules, 1944. Accordingly a show cause notice was issued to the appellants asking them to explain as to why Modvat credit taken on the strength of invoices issued by an unregistered dealer should not be denied to them and why penalty should not be imposed. After careful consideration of the submissions made before the lower authorities, the demand of Rs. 13,182/- was confirmed and penalty of Rs. 5,000/- was imposed. Against this order, the appellants have filed the present appeal.
3. Shri Raj Kumar, the Ld. C. A. appearing for the appellants submits that Modvat credit of duty was taken on 22-7-1994 whereas show cause notice was issued on 22-2-1995. The Ld. C. A. submitted that thus the show cause notice was clearly beyond a period of six months. He submits that Rule 57-I clearly lays down that show cause notice for recovery of Modvat credit wrongly taken should be issued within six months from the date of taking credit. He submits that there is no whisper in the show cause notice that there was fraud, misstatement, suppression or contravention of Rules with the intention to evade payment of duty. He submits that in the absence of any of these allegations, the demand for duty amounting to Rs. 13,182/- is wholly time-barred. The Ld. C. A.also cited and relied upon the decisions of the Tribunal in the case of C. C. A., Bhubaneswar v. Konark Cylinders & Containers (P) Ltd. reported in 1994 (73) ELT 703 as also in the case of Samrat Forgings Ltd. v. C.C.E., Chandigarh reported in 1996 (83) E.L.T. 622. Summing up his arguements, the Ld. C. A. submitted that demand in the instant case is time-barred and therefore, prays that the appeal may be allowed.
4. Shri Nanak Chand, the Ld. DR appearing for the respondent Commissioner submits that Notification No. 32/94 was issued on 4-7-1994 where under it was prescribed that invoice issued by a dealer of excisable goods registered with the Central Excise Authorities shall be the documents showing payment of duty under Rule 57G of the Central Excise Rules. The Ld. DR submitted that since this Notification was issued on 4-7-1994, it became effective from the date of issue that is 4-7-1994. The Ld. DR also submitted that credit of duty was taken on 22-7-1994, admittedly, this credit was not admissible to the appellants inasmuch as invoice on the strength of which this credit was taken was issued by a dealer who was not registered with the Central Excise Authorities. He therefore, submits that inadmissible credit was taken by the appellants 5. On the question of limitation, the Ld. DR submitted that Section 11A is wide enough to cover the situation like this. Reiterating the findings of the lower authorities, the Ld. DR prays that the impugned order may be upheld.6. Heard the submissions of both sides. The case was not argued on merits. The only point pressed before me was of limitation. I have gone through the show cause notice. There is no allegation of fraud, wilful misstatement or contravention of the Rules with the intention to evade payment of duty. I have also seen the order-in appeal passed by the Commissioner (Appeals) I find that there is no mention of the evidence relied upon by the Ld. Commissioner (Appeals) to hold that limitation of six months will not apply to the present case. Having regard to the fact that show cause notice did not allege the ingredients for extending the period beyond six months as also that no evidence was produced in support of ingredients and having regard to the ratio of the cases cited and relied upon by the appellants, I hold that demand was hit by limitation and is therefore, not sustainable.
7. On the question of penalty, I find that there was a contravention inasmuch as Modvat credit of duty was taken on the strength of invoices issued by an unregistered dealer. I find also that the C.B.E.C. in exercise of their powers conferred under Rule 57G had prescribed invoices issued by registered dealer as duty paying documents. In the instant case, the invoices were issued by an unregistered dealer and therefore, I hold that imposition of penalty is sustainable in law.
8. In the result, the impugned order is modified to the extent stated above and the appeal is disposed of accordingly. Consequential relief, if any, shall be admissible to the appellants in accordance with law.