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TMI Blog1999 (10) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... . The facts giving rise to both these appeals may briefly be stated as under 3. The appellants are engaged in the manufacture of crushed stones falling under sub-heading 2505 of the Schedule appended to the Central Excise Tariff Act and fabrication of steel shuttering plates, falling under sub-heading 7308.90 of the said Schedule, for the National Hydroelectric Power Corporation Limited. They and the National Hydroelectric Power Corporation, were served with two show cause notices one dated 3-5-1993 for the period April, 1990 to September, 1991 and the other for the period October, 1991 to January, 1992, vide which they were called upon to show cause as to why the Central Excise duty be not demanded and recovered from them for the periods mentioned therein under Rule 9(2) of the Rules read with Section 11-A of the Act by invoking the extended period of limitation as provided under the proviso to that Section, for having suppressed the material facts from the knowledge of the Revenue and also not obtained the Central Excise Licence and observed other statutory formalities, as required under the Central Excise Law. They were further asked to show cause as to why penal action agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. In order to elaborate the first ground, the learned Counsel has contended that the activities of the appellants in crushing the bigger stones into small one did not amount to `manufacture as no new product or distinct substance can be said to have been produced by them, by so doing. Therefore, no Central Excise duty can be legally claimed from them. In support of the contention, the learned Counsel has placed reliance on the following cases: (i) C.C.E., Bombay v. Kiran Spinning Mills reported in 1988 (34) E.L.T. 5 (S.C.). (ii) C.C.E., Aurangabad v. Shree Vindhya Paper Mills reported in 1988 (35) E.L.T. 361 (T). (iii) SAIL v. CCE reported in 1991 (54) E.L.T. 414. (iv) State of Tamil Nadu v. O.P. Aliyar reported in 1992 (87) STC 339 (Mad.). (v) Commissioner, Sales v. Mahalaxmi Stores reported in 1995 (97) STC 601 (Bom). (vi) CCE Madras v. Coimbatore Pioneer Fertilizers Ltd. reported in 1997 (94) E.L.T. 6. (vii) Hyderabad Industries Ltd. v. UOI reported in 1995 (78) E.L.T. 641 and (viii) Larger Bench decision of the Apex Court in the case of Hyderabad Industries Ltd. v. Union of India, reported in 1999 (108) E.L.T. 321. 8. In order to appreciate this conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process of construction. Bajjri is a new substance which is produced by crushing the big stones. The original character of the stones as such when crushed and converted into Bajjri, ceases to exist, rather fundamental change in the character of the stones, takes place when those are crushed and converted into Bajjri by a mechanical process. Therefore, the plea of appellants that the conversion of big stones into Bajjri by mechanical process, does not amount to `manufacture so as to attract; the provisions of Central Excise Act for payment of Central Excise duty, cannot be accepted. In this context reliance may also be placed on the case M/s. Hindustan Construction Co. Ltd. and M/s. Continental Construction Ltd. v. C.C.E. decided vide Final Order Nos. 421 to 425/99-C dated 25-5-1999, wherein the Double Member Bench of the Tribunal has held that crushing of boulders into small size stones amounts to `manufacture . 9. Law laid down in the case referred to above, relied upon by the learned Counsel for the appellants, is not attracted to the facts of the present cases. In the case of C.C.E. Bombay v. Kiran Spinning Mills (supra) the assessee was engaged in the cutting of man-made fab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouble Bench of the Tribunal, in the Hindustan Construction Co. Ltd. and Continental Construction Ltd. case referred to above and distinguished. The Tribunal in that case had held that the crushing of boulders into stones of smaller sizes, amounts to `manufacture under the provisions of the Central Excises Act. 13. Similarly, law laid in the case of CCE v. Coimbatore Pioneer Fertilizers Ltd. (supra) is not of any help to the appellants in the instant case. In that case it has been only ruled that pulverisation of rock Phosphate did not amount to manufacture of excisable goods. In both the cases of Hyderabad Industries (supra), the question is as to whether the crushing of boulders into small stones/bajjri by mechanical process, amounts to `manufacture or not, under the Central Excises Act, was not at all in issue. In the first case of Hyderabad Industries reported in 1995 (78) E.L.T. 641 (SC), the Apex Court has taken the view that Asbestos fibre separated from the rock in which it is embedded, by manual and mechanical means did not amount to `manufacture of excisable goods as no distinct or separate substance was manufactured. In that very case, reported in 1999 (108) E.L.T. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended period of limitation. For having kept, the Revenue department, in dark by appellants themselves, they cannot legally prevent the Revenue from invoking the extended period of limitation, for raising the demand of excise duty beyond six months, as proviso to Section 11-A has been inserted in the statute by the Legislature, to meet such like situations where the assessees indulge in production of excisable goods without supplying information to the Excise department, in a clandestine manner. 17. Therefore, the second contention put into service by the learned Counsel also falls to the ground. 18. However, keeping in view the facts and circumstances of the case, and the controversy involved, we find that it is a fit case wherein the penalty imposed deserves to be reduced. Therefore, the penalty amount is accordingly reduced from Rs. 1,50,000/- to Rs. 1,00,000/- (Rupees one lakh only) while rest of the order in A. No. E/1157/94-C is sustained. In the second appeal No. E/502/94-C no interference in the matter of excise duty and penalty is called for. 18. In view of the discussion made, both the appeals of the appellants are ordered to be dismissed subject to the modificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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