TMI Blog1998 (5) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... s obtained from mines. The lime stone so obtained is crushed and the crushed lime stone passes through various stages and ultimately results in production of cement. It was noticed by the Revenue that the two appellants removed some crushed lime stone to one another clandestinely and without payment of duty, and hence show cause notices were issued alleging contravention of the relevant Central Excise Rules by manufacturing and removing crushed lime stone falling for classification under Heading 25.05 of the CETA, 1985 without obtaining licence, without payment of duty and without following the procedure laid down under the Rules and further seeking to deny the benefit of Notification 448/86-C.E., dated 13-11-1986 and proposing recovery of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nger period of limitation is available to the Department. Our findings are as under : I. This issue has been settled by the decision of the Hon ble M.P. High Court in the case of S.N. Sunderson (Minerals) Ltd. v. Suptd. (Preventive) Central Excise, Indore reported in 1995 (75) E.L.T. 273 (M.P.). The High Court has held that Note 2 to Chapter 25 of the CETA, 1985 does not by artificial extension of the definition of the word `manufacture extend the process of crushing of lime stone to be a manufacturing process, but it is open to the Revenue to establish that the process involved in any case crushing of limestone extracted from mines into lime stone chips, is a process of manufacture. In that case, the High Court found that lime stone i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . II. Notification 448/86-C.E., dated 13-11-1986 exempts limestone in any form falling under sub-heading 2505.00 of the Schedule to the CETA, 1985 from the whole of duty of excise leviable thereon which is specified in the Schedule provided that such lime stone is used within the factory of production for the manufacture of cement clinkers and cement. The adjudicating authority s reasoning for denying the benefit of this Notification is contained in para 7 of the impugned order in which he has noted that M/s. New Vikram Cement and M/s. Vikram Cement were two different factories holding separate L4 Licences and hence he has rejected the contentions of the notices that removal of crushed lime stone from one unit to the other could be covere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2 to Chapter 25 and on the test of marketability. Para 17 of the M.P. High Court judgment clearly sets out that since there were divergent views of Courts raising bona fide doubt in the minds of the assessees as to whether crushing of limestone lumps to obtain lime stone chips would amount to manufacture and whether the resultant goods are excisable items, led to a bona fide belief in the minds of the assessee that they are not liable to pay excise duty, as they were not engaged in the manufacture of limestone chips and conversion of limestone lumps into limestone chips was never taken to be a manufacturing process by the assessees. In the case of Jaypee Rewa Cement v. CCE, Raipur (supra) following the reasoning of the Hon ble M.P. High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of S.N. Sunderson Minerals Ltd. - 1995 (75) E.L.T. 273. In the circumstances it is not the other orders of the Tribunal which have taken a different view but it is this order upheld by the High Court which was required to be kept in view. 8. In the instant case the department has not shown that the crushing of lime stone into powder is resulting into a new commodity known to the market. On the contrary the appellants have been able to show that it is being simply used in the manufacture of clinker/cement. 9. In the circumstances, there is no reason to disbelieve the appellant s contention that they were under the bona fide belief that crushing of lime stone did not amount to manufacture and therefore, no excise duty was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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