R. Jayaraman, Member (T)

1. For hearing the applicants appeal on merits, they are required to deposit a sum of Rs. 68,176.23, towards duty and Rs. 500/- towards penalty.

2. Shri Willington Christian, the learned Advocate, on behalf of the applicants, contended that the order of the authorities below is prima facie bad in law. The issue relates to the recovery of MODVAT credit alleged to have been wrongly availed of during the period from April 86 to October 1986. This was sought to be recovered by a show cause notice dated 16-11-1987. Shri Willington Christian stated that they have given a .declaration of the inputs in consultation with the departmental authorities as per their understanding and when they received the inputs, the gate pass showed different classification, which they themselves brought to the notice of the department and sought to correct the clerical mistake. There was no revenue implication involved either by way of MODVAT credit on ineligible input getting credit. After this application for rectification was made, the amended declaration was accepted. All the same for the period from April 86 to October 86, a show cause notice came to be issued only on 16-11-87, much beyond a period of six months. In the show cause notice, there was no allegation of suppression but reference to Rule 173Q was made for imposition of penalty. If the notice is taken as alleging suppression of facts, then it ought not to have been issued by the Supdt., since as per the amendment to Section 11A proviso, only the Collector can issue such a notice. If no allegation of suppression can be construed in the show cause notice, then the show cause notice itself is bad in law because it seeks to cover a period beyond six months and the demand is, therefore prima facie bad in law on the ground of time-bar. Shri Willington Christian also eked the judgment of this Tribunal in the Stay application No. E/Stay-378/88 Bom, in Appeal No, E/236/88 Bom., (Order No 1358/88/WRB, dated 22-9-1988) in the case of Royal Cushion Vinyl Product Pvt. Ltd. v. Collector of Customs and Central Excise, Vadodara.

3. Heard Shri CP Arya, the learned SDR. He contended that reference to Rule 173Q clearly indicates that the extended period is applicable in this case. He also contended that in the Case of MODVAT credit no time limit is prescribed for recovery.

4. After hearing both sides, we agree with Shri Willington Christian that the notice is prima facie time-barred. If it is to be held that extended period has been invoked, there should have been specific allegation of misdeclaration etc. which are not found in the show cause notice. In case such an allegation is said to have been made, then the show cause notice should have been issued by the Collector. This Bench has already taken a view that even in respect of recovery of MODVAT credit, the time limit prescribed under Section 11A is applicable. In the above view of the matter, we are satisfied that the demand is prima facie time-barred. Hence we grant an unconditional stay.