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2022 (10) TMI 579 - SC - Central ExciseExemption from Excise duty - imported paraffin/wax used by the Assessee in the process of manufacturing of cotton yarn - can be said to be a raw material or not - whether Assessee was entitled to the benefit of Notification No. 8/97-C.E., dated 1-3-1997 or not? - extended period of limitation - HELD THAT:- So far as the issue whether the Assessee was entitled to benefit of Notification No. 8/97-C.E., dated 1-3-1997 is concerned, the same is squarely covered against the Assessee in view of the decision of this Court in the case of M/S. MERIDIAN INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2015 (11) TMI 94 - SUPREME COURT] where this Court considered the very exemption notification and the use of wax in manufacturing of cotton yarn. After detailed analysis of the submissions made on behalf of the Revenue and Assessee and after considering the process of manufacturing cotton yarn and definition of “raw material”, ultimately it is observed and held that the wax used in manufacturing of cotton yarn is a raw material/input and therefore, the Assessee is not entitled to the benefit of notification dated 1-3-1997. Therefore, on merits the Learned CESTAT is not right in holding that the Assessee was entitled to benefit of Notification No. 8/97 for concessional rate of duty. Extended period of limitation - HELD THAT:- As this Court laid down the law and clarified the law only in the year 2015 and till then, the issue was at large and therefore, on facts it cannot be said that there was any suppression on the part of the Assessee in disclosing the true and correct facts - it is to be noted that the demand for some period can be said to be within the period of limitation. Therefore, to the extent, the Department invoked the extended period of limitation, the demand must fail, as the Department was not justified in invoking the extended period of limitation. Now the Department to re-calculate the duty/differential duty to the extent the demand/show cause notice was found to be within the period of limitation/time. At the cost of repetition, it is observed that the demand of duty/differential duty found to be beyond the period of limitation by invoking the extended period of limitation is held to be unsustainable and bad in law. Appeal allowed in part.
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