CEA No.108 of 2009 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No.108 of 2009 DATE OF DECISION: April 21, 2010 M/S BHAWANI CASTINGS (P) LTD. ...PETITIONER MANDI GOBINDGARH VERSUS COMMISSIONER CENTRAL EXCICE, CHD. ...RESPONDENT CORAM: HON'BLE MR. JUSTICE ASHUTOSH MOHUNTA. HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR. PRESENT: MR. SUDEEP SINGH, ADVOCATE FOR THE PETITIONER. MR. GURPREET SINGH, SR.STANDING COUNSEL FOR THE RESPONDENT. ASHUTOSH MOHUNTA, J.(ORAL) The assessee-appellant has impugned the order dated 12.8.2009, passed by the Customs, Excise & Service Tax Tribunal (for short 'the Tribunal') vide which it has been held that penalty has rightly been imposed upon the appellant and the period of limitation would not be attracted, because the deposit of duty was payable under the compounded levy scheme. Counsel for the appellant submits that the appellant had deposited the duty in March, 2000, a few days later than the prescribed period of limitation. It is pertinent to mention here that the duty was deposited alongwith the interest. The Department issued a show cause notice (Annexure A-1) to the appellant on 4.12.2006, demanding penalty. The penalty was imposed by the adjudicating authority and the said order was confirmed by the Tribunal. Counsel for the appellant submits that as CEA No.108 of 2009 -2- the show cause notice (Annexure A-1) was issued to the appellant after more than 6 years of the deposit of the duty by the assessee, hence, the show cause notice was bad in law in view of the decision in Commissioner of Central Excise, Chandigarh vs. Hari Concast (P) Ltd., reported as 2009 (242) ELT 12 (P&H), wherein it has been held that if no statutory period of limitation has been prescribed then the proceedings for imposition of penalty should be initiated not later than 5 years. Similar view was taken in CWP No.7123 of 2005, titled as M/s Tara Chand Sham Lal vs. State of Punjab and others, decided on 16.9.2009. On the other hand, Sh. Gurpreet Singh, Sr.Standing counsel for the Revenue has submitted that since the penalty was being demanded under the compounded levy scheme, therefore, no period of limitation would be applicable. On the basis of the aforementioned facts, the following question of law arise for consideration in the present appeal:- “Whether the Tribunal is right in holding that the proceedings for imposition of penalty could be initiated even after the period of five years.” In the present case, although the duty alongwith interest had been paid as far back in March, 2000 and the show cause notice was issued on 4.12.2006, i.e. after a gap of more than 6 years, therefore, we are of the considered opinion that where no statutory period has been prescribed for initiating proceedings for imposition of penalty under Section 96 ZO3, then the proceedings should be initiated within a period of 5 years and not later than that. This view of ours is in consonance with the decision in Hari Concast's case (supra) and Tara Chand's case (Supra). CEA No.108 of 2009 -3- In view of the above, the orders passed by the adjudicating authority as well the Tribunal cannot be sustained and the issuance of show cause notice (Annexure A-1) and all subsequent proceedings are bad in law. Accordingly, this appeal is accepted and the orders passed by the authorities below are set aside. (ASHUTOSH MOHUNTA) JUDGE April 21, 2010 (MEHINDER SINGH SULLAR) Gulati JUDGE