TaxTMI 
TaxTMI 
2009 (1) TMI 375
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....is not invokable under the proviso of Section 11-A of the Central Excise Act, 1944, demand even for normal period of limitation is not valid?" 2. Brief facts of the case are that the dealer-respondent was engaged in the manufacture of PCC Websole Panels and crushed aggregate stones (Buzri) classifiable under sub-heading 68.07 and sub-heading 2505.90 of the Central Excise Tariff Act, 1985 (for brevity, 'the Tariff Act'). The work places of the respondent for manufacture of Websole Panels were situated at Village Sherpur (Ludhiana), Chheheru (Phagwara), by use of fabricated steel moulds, whereas the crushed stones were manufactured in village Chandpur, Rurki, Tehsil Garshankar, District Hoshiarpur by installation of stone crushing plant. The Websole Panels manufactured by the respondent were used for construction of over bridges on roads and crushed stones were used for four-laning of the National Highway. Excise duty is leviable on both these items. It is claimed by the revenue that the respondent started the above mentioned activities without obtaining Central Excise Registration under Rule 174 of the Central Excise Rules, 1944 (for brevity, 'the Rules') and no Central Excise du....
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.... 11A. Mis-statement 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 amounts to manufacture. In view of the divergent views, of the various High Courts, there was a bona fide doubt as to whether or not such an activity amounted to manufacture. This being the position, it cannot be said that merely because the appellants did not take out a licence and did not pay the duty the provisions of Section 11A got attracted. There is no evidence or proof that the licence was not taken out and/or duty not paid on account....
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.... pay the amount specified in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, 3[as if 4|***|| for the words 5["six months"], the words "five years" were substituted:" 8. The aforesaid provision was subject matter of consideration by Hon'ble the Supreme Court in the case of C.C.E. v. Chemphar Drugs and Liniments, Hyderabad - 1989 (40) E.L.T. 276 (S.C.) = (1989) 2 SCC 127. Hon'ble the Supreme Court had observed in Para No. 9 of the judgment that in order to sustain an order of the Tribunal beyond a period of six months (as it stood then) and upto a period of five years in view of the proviso in sub-Section 1 of Section 11A of the Act, it is required to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or....
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.... that that there was divergence of opinion amongst various High Courts whether crushing of bigger stones or boulders into smaller pieces amounts to manufacture. Accordingly, there was bona fide doubt as to whether or not such an activity could attract the payment of duty and the dealer-respondent did not apply for licence. Once the aforesaid factual position is clear then the judgment of Hon'ble the Supreme Court in Jaiprakash Industries Ltd. (supra) would fully apply to the case in hand. The view of Hon'ble the Supreme Court as correctly quoted by the Tribunal reads thus:- "In this case, there was a divergent view of the various High Courts whether crushing of bigger stones or boulders into smaller pieces amounts to manufacture. In view of the divergent views, of the various High Courts, there was a bona fide doubt as to whether or not such an activity amounted to manufacture. This being the position, it cannot be said that merely because the appellants did not take out a licence and did not pay the duty the provisions of Section 11A got attracted. There is no evidence or proof that the licence was not taken out and/or duty note paid on account of any fraud, collusion, wilful m....