TMI Blog2013 (9) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... nial of notification, in question, is neither justified nor warranted – Decided in favor of Assessee. Limitation – Issue of Show-cause notice issued after 15 years from the date of visit of the Revenue officers - During the search operation, certain processed fabrics were also put to seizure by the officers, which action was challenged before the Hon’ble Allahabad High Court. The High Court only stayed the recovery of duty in respect of such seized fabrics – Held that:- Nothing in the order of the Hon’ble High Court restraining the Revenue from issuing a show cause notice for the past period. As such the Revenue’s stand that they were restrained by the Hon’ble High Court for issuance of the show cause notice during pendency of the writ-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the factory. 3. It is seen that the seizure of the processed fabrics was challenged by the appellant before the Hon ble High Court of Allahabad, who vide their order dated 21st May, 1984 directed the Revenue to release the stock of detained goods and also restrained them from realizing excise duty in respect thereof during the pendency of the writ-petition. 4. Based upon the above facts, a show cause notice dated 30/8/99 was issued to the appellant proposing confirmation of demand of duty for the period 1981-1983, the said show cause notice stands culminated into the impugned order passed by the lower authorities, confirming demand of duty of Rs. 18,43,033.71 and imposing penalty of Rs. 19,00,000/-. 5. The appellant s contention, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of the Tribunal, she submits that such use of steam is not use of power in the manufacturing process and as such cannot be held to debarred from the admissibility of the notification, in question. 6. Countering the arguments, learned DR submits that in as much as during the intervening period, the matter was pending before the Hon ble High Court, such period has to be excluded for the purpose of limitation. As soon as the High Court disposed of the writ-petition on 28/11/96, and the order was received by the Revenue on 25th March 1998, they issued the show cause notice on 30/8/99. As such, he submits that the longer period of limitation was rightly availed by the Revenue as the appellant never informed the use of steam in drying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Board referred to in that decision was with reference to the Notification 212/77, dated 6/7/1977 and called for a finding whether the processes of hydro-extraction could be deemed to be a finishing process. Hydro-extraction merely resulted in the extraction of moisture from the bleached fabric and as observed by the Board it did not, in any way result in the improvement in the quality of the fabrics so processed. We do not agree that the process of hydro-extraction and drying would bring into existence a different commercial commodity or transformed the dyed yarn into another product. 20. We are of the view that examining the matter from the basic concept of hydro-extraction, the view of the majority in 1985 (6) ETR 495 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. Bansali, partner of the firm, reproduced below :- After dyeing the fabrics of thin texture e.g. Dosutie cloth and other fabrics except canvas are rolled down on hangers fixed open to sun and air and the cloths are dried. For drying of canvas, we deploy a mechanical process consisting of drums and rollers centrally heated by steam on which the dyed canvas is laid and drums are gyrated by manual labour to get the canvas dried by the heat supplied by steam inside the drums. It is a slow process and obviously does not need speed so fly wheel-gyrators are sufficiently and efficiently operated by hand. 11. The use of steam cannot be held to be as used in the dyeing process. It is a case where the steam is not used for running of any machi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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