TMI Blog2007 (12) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... ber (T) [Order per: P.C. Chacko, Member (J)]. -1. This appeal filed by the assessee is against a demand of duty on lubricant and coolant repacked from bulk to smaller packs and cleared to M/s. Indian Oil Corporation Ltd. (IOCL), as a job work, from March, 1997 to January, 1998. Prior to 1-3-1997, the activity of repacking the said goods was not "manufacture as defined under Section 2(f) of the Central Excise Act, 1944. With the insertion Note 5 in Chapter 38 of the First Schedule to the Central Excise Tariff Act by the Finance Act, 1997, this activity came to be deemed to be 'manufacture' for the purpose of levy of duty of excise, with effect from 1-3-1997 The appellants, however continued to clear the repacked oils to M/s. IOCL witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation. Further, they pointed out that, after having come to know their duty liability in July,1998 they had immediately worked out the duty at Rs5,00,696/ - and paid the same voluntarily, which was prior to the issue of the show-cause notice. In their reply, the party also questioned the quantification of duty without taking into account the MODVAT credit on inputs. In adjudication of the dispute, the Commissioner, after hearing the party, passed the impugned order. The demand of duty was confirmed only to the extent of Rs.7,19,538/- and the amount of Rs.5,00,696/- already paid by the assessee was appropriated towards the same. A penalty of Rs. 7,19,538/- was also imposed on the party under Section 11AC. However, the proposal to pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice and the contested demand is barred by limitation, there can be no penalty on the assessee. We have also heard ld. SDR, who has reiterated the findings of the Commissioner. 3. After giving careful consideration to the submissions, we note that the duty liability to the extent of Rs. 5,00,696/- has been conceded by the assessee and that the demand of differential duty (Rs.7,19,538 minus Rs.5,00,796/-) is contested on the ground of limitation. The appellants, admittedly, had no liability to pay duty of excise on the repacked goods prior to 1-3-1997 and, as a SSI unit they were not required to get registered with the department during such period. It was with the introduction of Chapter Note 5 ibid that the activity of repacking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), that the extended period of limitation was not invocable against the assessee as show-cause notice dated 31-8-2001 was issued to them by the department after completing investigations as early as in August, 1996. The facts of the present case seem to be comparable. The Central Excise officers visited the assessee's factory in July, 1998 and gathered all the material facts. The show-cause notice was, however, issued three-and-a-half years later. No material is available on record to indicate that the department was pre-occupied with further investigations during the intervening period. On the other hand, the show-cause notice is based exclusively on facts gathered by the officers in July, 1998. The ratio of the Hon'ble Hig Court's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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