1998 (5) TMI 146 - AT - Central Excise

Tribunal rules on limestone crushing process, exemption eligibility, and extended limitation period.

The Tribunal determined that the process of crushing limestone constitutes manufacturing, making it eligible for exemption under Notification 448/86-C.E. ... Manufacture Issues involved: Determination of whether the process of crushing of lime stone constitutes manufacturing, entitlement to exemption under Notification 448/86-C.E., and availability of extended period of limitation.Issue I - Process of Crushing of Lime Stone: The Tribunal referred to a previous decision by the Hon'ble M.P. High Court and held that the process of crushing lime stone into small pieces amounts to manufacture. The Tribunal found that the lime stone obtained after crushing is marketable and falls under Heading 2505 of the CETA, 1985.Issue II - Benefit of Notification 448/86-C.E.: The Notification exempts limestone used for manufacturing cement within the factory from excise duty. The Tribunal upheld the adjudicating authority's decision that the benefit of the Notification is not available to the appellants as the crushed lime stone was transferred between separate legal entities, thus not meeting the conditions of the Notification.Issue III - Extended Period of Limitation: The Tribunal held that the extended period of limitation is not available to the Department. Citing previous judgments, it concluded that the demands were time-barred as there was a bona fide belief by the assessees that crushing of lime stone did not amount to manufacture, and there was no intent to evade duty.The Tribunal set aside the duty demands and penalties in both cases due to being time-barred, as the demands were beyond the normal period of limitation. The appeals were disposed of accordingly.