TMI Blog1995 (1) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... idered necessary keeping in view the facts and evidence on record. The Noticee vide their letter RCW/Sales/Excise dated 3.-2-1991 have clearly admitted the fact of crushing of limestone inside their factory premises during the aforesaid period i.e., 20-3-1990 to 16-9-1990 which was not declared earlier. Further, I find that the conduct of the Noticee in so far as it relates to declaration of value of the crushed limestone smacks of deceit in as much as they had deliberately mis-declared the same to be Rs. 16/- MT vide their letter dated 3-2-1991. It was only at the instance of the department that they had to revise the same to Rs. 50.07 MT clearly establishing their mala fide intentions to cheat the exchequer by prepetuating the breach of trust already committed in suppressing the overall activities relating to crushing. Giving false and misleading information invites penalty under Rule 198 of Central Excise Rules, 1944. In view of the facts and circumstances of the case, I pass the following order :- I confirm the demand of duty on crushed limestone amounting to Rs. 74,27,464.46 under Rule 9(2) readwith Section 11-A of the Central Excises and Salt Act, 1944, which should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts stated above, I order for the withdrawal of the said demands as shown in Annexure A. and that with the issue of this order by the Asstt. Collector, the appellant was convinced that there was no duty payable on powdered limestone; that the department cannot issue the present show cause notice on 27-1-1992 for the period 20-3-1990 to 16-9-1990 without adducing any further evidence; that no new fact has been brought out in the show cause notice dated 27-1-1992; that though Proviso to Section 11A for extending the period of the demand beyond six months has been invoked, no suppression of fact, mis-statement thereof to extend the demand for duty beyond six months has been brought out; that after hearing the case on 30-3-1990, a corrigendum to the Show Cause Notice was issued enhancing the demand to Rs. 74,27,564.46 from Rs. 21,57,579; that the demand is time-barred. The ld. Advocate argued that the process of manufacture of cement including crushing of limestone into powder was submitted to the department; that in the allegations, it has been mentioned in the Show Cause Notice that the appellant was procuring limestone, the ld. counsel submitted that the appellant had not pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequential relief should be granted to them. 5. Sh. Sharad Bhansali, the ld. SDR appearing for the Revenue submitted that there are three issues which need determination in the instant case. (a) Issue No. 1 is whether crushing, grinding and powdering is a process of manufacture. (b) Whether the appellant was liable to pay duty during the period 20-3-1990 to 16-9-1990; and (c) Whether extended period under proviso to Section 11-A of the CESA, 1944 can be invoked in the circumstances of the instant case. 6. On the question of manufacturing, the ld. SDR referred to Note 2 of Chapter 25 wherein it has been clearly provided that crushed, ground, powdered etc. limestone shall be classifiable under Chapter Heading 25.05 and shall be excisable. Distinguishing the case law cited and relied upon by the appellants, the ld. SDR submitted that in view of this clear provision in the Tariff itself, no case law or assistance is required, and that the case law can be easily distinguished. 7. On the question whether duty during the period 20-3-1990 to 16-9-1990 was demandable, the ld. SDR submitted that during this period exemption available under Notn. No. 217/86 was withdrawn and, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No. 1 to hold that the petitioner is not involved in any manufacturing activity and could not claim the eligibility certificate for sales tax exemption. In this decision, the Hon ble, M.P. High Court had also discussed its earlier decision in the case of Bheraghat Mineral Industries v. Divisional Dy. Commissioner of Sales Tax, reported in 1992 (61) E.L.T. 560. 13. Though this decision was in respect of Sales Tax matters, however, the two Acts being similar, this view can be applied to the present case before us as the facts in the two cases are similar. 14. In the case of Ajanta Marbles and Chemical Industries, reported in 1991 (53) E.L.T. 457, this Tribunal had held :- * * * * * * This decision of the Tribunal is directly on the goods classifiable under 25.05 of the Central Excise Tariff and supports the view that grinding of limestone into powder will amount to manufacture. 15. Again in the case of SAIL v. CCE, reported in 1991 (54) E.L.T. 414 this Tribunal had held :- In the instant case, the department has not produced any evidence to the effect that lime fine is known and recognised as commercially a distinct commodity in the market and has merely relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case before us, we find that allegation against the appellant is that he contravened various provisions of the Central Excise Rules and Central Excise Act with the intention to evade payment of duty. However, for proving this we do not find any evidence on record to show that the appellant had purposely and intentionally withheld or kept back any information from the Deptt. Simply because the appellant did not comply with the Central Excise formalities in the bona fide belief that the goods were not liable to duty or duty was not payable as the earlier show cause notices were discharged by the Asstt. Collector, we find that the Revenue has not been able to make out a case for extension of the period for demand of duty beyond six months and therefore on this ground alone the demand beyond six months is barred. We, therefore, hold that the appellants cannot be asked to pay duty during the period 20-3-1990 to 16-9-1990. As the entire demand in this case is beyond six months therefore, this is time barred. 20. Without going into the question whether demand was justified or not, we hold that the demand is time barred. On the question of imposition of penalty, we find that in the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a process of manufacture and only that process which results in transformation into a new commodity amounts to manufacture. It has also been held that a mere mention in Tariff is not sufficient and therefore, the fact of manufacture is required to be established and where apart from the Section (2f) the chapter-wise position is also required to be taken into account the aspects noted in the case of SAIL (supra) assume critical importance. 25. I see no reason to differ from the view held by the Tribunal in that order, I may only add and clarify that Chapter Note 2 would come into play, if and only if, it was shown in the first instance that the process(es) resulted in production of a distinct commodity known to the market as such and not otherwise. 26. It is significant in this connection that the processes mentioned in Chapter Note 2 are the well known processes used for purification/concentration of ores and extraction of minerals or metals therefrom. Normally ores are subjected to a series of such processes before a final product in the form of a commodity known to the market emerges or comes into existence; And the idea behind mentioning the processes under chapter note appa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
