1994 (10) TMI 171

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....gust 1987 and imposing a penalty of Rs. 1 lakh for contravention of the relevant rules. The brief facts of the case are that on the basis of information gathered, the Central Excise Preventive Officers visited the factory premises of the appellants who are manufacturers of auto parts and accessories. They were found to be availing Modvat credit in respect of copper wires and chemicals (nickel sulphate, nickel chloride, boric acid and chromic acid etc.) without actually bringing the same into the factory and without utilising the same for manufacture of their finished product inside the factory. It was also observed that there was no facility for electroplating the goods. Statement of Sudhir Pahuja, Manager was recorded in which he stated th....

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....nd on the ground of non-obtaining of Rule 57F(2) permission and also imposed penalty. Hence, this appeal. 2. Smt. Archana Wadhwa, learned Counsel for the appellants referring to the statement of the Manager, submits that it has been retracted immediately and, therefore, no weightage can be attached thereto. She submits that the crux of the matter is whether Modvat credit can be denied solely on the ground of non-observance of procedural requirement of Rule 57F(2), if otherwise eligible and in this connection she draws our attention to the show cause notice and the order which proceed on the basis that the appellants are not eligible to Modvat solely for this reason. The show cause notice itself indicates that the appellants had been....

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.... extended period of limitation is not available to the Department as suppression, if any, came to an end on 4-8-1987, i.e. the date when the officers visited the appellants' factory and hence the show cause notice should have been issued within 6 months from that date. She, therefore, prays for setting aside of the duty demand and penalty. 3. Learned DR, Shri Satish Shah contends that the Collector has rightly relied upon the statement of the appellants' Manager which cannot be said to have been retracted as the letter dated 5-8-1987 to the Chairman, CBEC has been issued by the authorised signatory of the appellants and is not a retraction by the Manager. The stand of the appellants that they had their own electroplating machine whi....