TMI Blog2004 (1) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... on of roads and bridges for four laning of National High Way No. 1 from Khanna to Jalandhar carried out during the period March, 1989 to February, 1994; that a show cause notice dated 31-3-1994 was issued to them for (i) demanding Central Excise duty on the Websols and crushed stones manufactured by them, (ii) confiscating websols and crushed stones, and (iii) imposing penalty under Rules 9(2), 173Q and 226 of the Central Excise Rules, 1944; that the Collector, Central Excise, under Order-in-Original No. 85/C.E./94, dated 25-10-1994 confiscated the seized goods, confirmed the demand of duty in respect of websols and crushed stones and imposed personal penalty of Rs. 20 lakhs; that the Appellate Tribunal, vide Final Order No. 1049/99-D, date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Supreme Court in Jaiprakash Industries Ltd. v. C.C.E., Chandigarh, 2002 (146) E.L.T. 481 (S.C.) that "mere failure or negligence on the part of the manufacturer in not taking out a licence and in not paying duty does not attract the extended period of limitation. This court has held that there must be evidence to show that the manufacturer knew that the goods were liable to duty and that he was required to take out a licence..... This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous order no longer survives. The Commissioner ought to have adjudicated the matter on all aspects including penalty. Therefore, his finding that the Tribunal has not given any direction on the issue of penalty and hence he retains the amount which had been imposed as penalty at the first instance is a wrong order and is totally unsustainable in law." The learned Advocate, thus, contended that the Commissioner has thus not discharged the burden to prove that there is manufacture of dutiable goods and whether stone aggregate is liable to Central Excise duty. He relied upon the decision in the case of State of Maharashtra v. Mahalaxmi Stores, 2003 (152) E.L.T. 30 (S.C.) = (2003) 1 S.C.C. 70 wherein the Supreme Court has held that crushin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hindustan Construction Co. Ltd. v. C.C.E., Chandigarh, 1997 (89) E.L.T. 123 (T). Reliance has also been placed on the decision in Larsen Toubro Ltd. v. C.C.E., Raipur, 2000 (115) E.L.T. 172 (T) wherein the Tribunal has held that crushing of boulders into stones amounts to manufacture as it brings into existence a new excisable commodity and that crushed gitties are classifiable under sub-heading 2505.90 of the Schedule to the Central Excise Tariff Act. On reply, the learned Advocate submitted that even in Hindustan Construction case, the Tribunal has specifically held that "longer period of limitation would not be applicable as the issue cannot be said to have been free from doubt."; that the decision in the case of Larsen Toubro als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Misstatement or suppression of fact must be wilful." The Supreme Court considered the aspect of invocability of proviso to Section 11A in similar facts in the case of Jaiprakash Industries Ltd., 2002 (146) E.L.T. 481 (S.C.) wherein also the appellants were engaged in construction activities and as part of their business they crushed boulders into "bajri" which is then used in the construction work. They did not consider the activities of crushing boulders into bajri to be a manufacturing activity. They, therefore, did not apply for any licence nor paid excise duty. The Supreme Court has held as under : "In this case, there was a divergent view of the various High Courts whether crushing of bigger stones or boulders into smaller pieces a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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