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Issues:
1. Interpretation of Notifications regarding excise duty exemption on corrugated boards. 2. Application of the period of limitation under Rule 10 of the Central Excise Rules. Analysis: Issue 1: Interpretation of Notifications regarding excise duty exemption on corrugated boards The petitioner, a private limited company engaged in manufacturing corrugated boards and boxes, relied on Notification No. 46 of 1971 for excise duty exemption. However, Notification No. 14 of 1978 introduced a new proviso regarding the exemption criteria based on the type and duty paid on raw materials used. The Central Government later issued Notification No. 159 of 1978, which nullified the effect of the earlier Notification No. 14 of 1978, reverting to the original exemption criteria under Notification No. 46 of 1971. The petitioner was then accused of clearing and manufacturing corrugated boards without paying duty as per the amended Notification. The court examined the validity of the demand notice issued to the petitioner. Issue 2: Application of the period of limitation under Rule 10 of the Central Excise Rules The key question was whether the show cause notice should be governed by the six-month limitation period under Rule 10 or the extended five-year period under the proviso for cases involving fraud, collusion, misstatement, or suppression of facts. The court analyzed the absence of any evidence or mention of fraud or misrepresentation in the show cause notice. Additionally, the court considered positive circumstances favoring the petitioner, such as the approval of revised classification lists and regular filing of RT-12 returns. The court referred to a previous decision by the Collector of Central Excise, where the limitation period was held to be six months in similar cases. Ultimately, the court concluded that the six-month limitation period applied to the petitioner's case, setting aside the demand notice and instructing the Assistant Collector to reconsider the matter within the specified timeframe. In conclusion, the court allowed the petition, quashed the earlier order, and directed a reassessment of the demand notice within the six-month limitation period. The petitioner agreed to pay the determined amount within thirty days of notification, leading to the cancellation of the bank guarantee. The ruling was made without any costs imposed on either party.
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