2002 (8) TMI 769

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....appellants and imposing penalty of Rs. 2 lakhs. 2. The appellants are engaged in the manufacture of branded electronic exhaust fans. In the manufacture of these fans, aluminium alloy ingots are their one of the inputs. They availed deemed Modvat credit of the disputed amount during the periods in 1989-90, 1990-91, 1991-92 (till 8-1-1992) on aluminium alloy ingots. These goods were purchased by them from M/s. Avon Alloys & Casting Co. and M/s. Baldev Metals Pvt. Ltd. (both authorised stockists of M/s. Hindustan Alloys Manufacturing Co. Ltd., Bombay). The Department issued them show cause notice after invoking the provisions of Section 11A of the Central Excise Act and vide which the recovery of the amount of which they had taken Modv....

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....uperintendent of the Department even defaced the invoices. There had been also audit of the accounts of the appellants by the Department but, at no stage, objection was taken about the wrong availment of Modvat credit of the disputed amount by the appellants. All the facts were within the knowledge of the Department. Therefore, the demand raised by the Department is time-barred. 5. On the other hand, the learned SDR, has not been able to refute this contention of the learned Counsel. He has only stated that when the facts came to the notice of the Department that the goods were cleared by the manufacturer under exemption Notification No. 180/88-C.E. without payment of duty, the show cause notice was served on the appellants and as s....