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TMI Blog1998 (6) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... on M/s. Thangam Industries under Rule 173 and Rule 209A respectively. 2. There are two appeals filed one by M/s. Duraiappa Lime Products against confirmation of duty and penalty and the other by M/s. Thangam Industries against penalty only. 3. The proceedings against the appellants were commenced by issue of show cause notice dated 11-1-1990 for invoking of larger period on the ground that the appellants are engaged in the manufacture of lime powder falling under Heading 2505.00 of Central Excise Tariff Act, 1985. The departmental officers visited the factory and recorded statements and after detailed investigation, show cause notice was issued directing the appellants to show cause as to why duty amount as confirmed should not be recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants and larger period of limitation is not invokable. 6. The Tribunal again examined the issue pertaining to extension of larger period in identical case as in the case of M/s. Bhawanthadi Minerals v. CCE reported in 1997 (23) RLT 260, wherein the Tribunal after noting all the judgments on the issue held that the appellants held bona fide belief with regard to the non-excisability of the item and hence larger period cannot be invoked in the present case. 7. Learned SDR reiterates the department s contention. He submits that there is clear suppression in the matter. The party had not raised the issue pertaining to the bona fide belief held by them and hence the judgments cited are distinguishable. 8. Learned Advocate in counter po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the department nor are considered by the 2nd respondent to show deliberate avoidance of payment of duty. There is nothing in the Excise Act or the Rules thereunder that the authority is bound to impose penalty, the moment there is default in payment of duty. The petitioners were under a bona fide belief that they are not liable to pay excise duty on the lime stone chips. The Collector Central Excise, while passing orders (Annexures M N) imposing penalty has not at all taken into consideration this aspect of the case. Therefore, we are of the opinion, that as the petitioners were under a bona fide belief about their liability to pay excise duty, the Collector, Central Excise has acted rather harshly imposing penalty of Rs. 5,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem is not dutiable in view of the M.P. High Court judgment in the case of Mahavir Minerals holding that the item has to be non-dutiable. The M.P. High Court in the case of S.N. Sunderson (Minerals) Ltd. v. Suptd. (Preventive) Central Excise as reported in 1995 (75) E.L.T. 273, wherein the question of confirmation of larger period was considerable. The M.P. High Court held that in view of the contrary judgments of Tribunal and the High Court, their existed bona fide belief regarding the non-dutiability of the item. The Hon ble High Court therefore, held that the invocation of larger period by alleging suppression does not arise and the plea of bona fide belief held by the assessee is required to be accepted. Noting the judgment of the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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