2002 (11) TMI 92 - SUPREME COURT

Whether the activity of crushing boulders into bajari amounts to manufacture and whether the "bajari" is a new product having a distinct name, character or use?

Whether the Respondent could have invoked the extended period of limitation under Section 11A for the demand under the Show Cause Notice dated 3rd May, 1993?

Held that:- In this case, there was a divergent view of the various High Courts whether crushing of bigger stones or boulders into smaller pieces amounts to manufacture. In view of the divergent views, of the various High Courts, there was a bona fide doubt as to whether or not such an activity amounted to manufacture. This being the position, it cannot be said that merely because the Appellants did not take out a licence and did not pay the duty the provisions of Section 11A got attracted. There is no evidence or proof that the licence was not taken out and/or duty not paid on account of any fraud, collusion, wilful mis-statement or suppression of fact. We, therefore, set aside the demand under the show cause notice dated 3rd May, 1993.

As regards the demand under the show cause notice dated 26th February, 1992, Mr. Sridharan states that the Appellant has already paid the amount. He states that he is not pressing this Appeal in respect of the demand under that show cause notice. Thus we see no reason to decide the other question, viz, whether crushing of stones amounts to manufacture and whether a new product has come into existence. We leave this question open.