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2011 (2) TMI 991 - AT - Central ExciseClassification - The respondents are engaged in the weaving of cotton grey fabrics and were not registered with the Central Excise Department and were not paying any duty of excise - ow cause notice dated 28.08.03 raising demand of duty for the period 1998-2003 on the ground that the fabrics manufactured by the respondent were in fact leno gauze fabrics, which were properly classifiable under Heading 58.03 - The classification dispute stands decided against the respondents, in the case of CCE Ahmedabad Vs. Neptune Textile Mills Ltd.[2009 (2) TMI 290 - CESTAT, AHMEDABAD] - As such allow the Revenue s appeal on merits. Extended period of limitation invoked - Held that:- As decided in Padmini Products Vs. CCE [1989 (8) TMI 80 - SUPREME COURT OF INDIA] has observed that mere failure or negligence on the part of the manufacturer either not to take out a licence or not to pay duty in case where there was scope for doubt, does not attract the extended limitation, unless there is evidence that the manufacturer knew that goods were liable to duty or he was required to take out a licence - Therefore, find that no ground has been made out for invoking the suppression and extended period in the show cause notice and neither the adjudicating authority nor the appellate authority has considered the issue at all - All seem to think violation of provision of rules, if cited, is sufficient to invoke extended period and thereby penalty under Section 11AC of Central Excise Act, 1944 - the demand beyond the period of limitation is barred - the respondents submits that while quantifying the demand within the limitation period, the benefit of cum duty price is required to be extended - Direct the authorities below to do so, while quantifying the demand within the limitation period.
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