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TMI Blog2001 (9) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... woollen yarn as well as hosiery articles in two separate premises; that yarn in plain reel hanks was cleared under exemption from the spinning unit for being used in the Hosiery Factory for the manufacture of Hosiery Articles which involves conversion from plain hanks to cones; that the Additional Commissioner, under Adjudication Order No. 8/99 dated 30-6-1999, demanded Central Excise duty amounting to Rs. 1,71,637/- in respect of yarn on cones cleared during the period from 16-3-1995 to 31-3-1996 in terms of Note 3 to Chapter 51 of the Schedule to the Central Excise Tariff Act and imposed a penalty of equal amount under Section 11AC of the Central Excise Act. The learned Advocate at the outset mentioned that he is not challenging the levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made and the case law cited by both the sides, we find that for purpose of invoking the extended period of time for demanding Central Excise Duty, fraud, collusion, wilful mis-statement or suppression of facts with intent to evade payment of duty required to be proved. Examining the present case, we find that the appellant was manufacturing woollen hosiery products, over a period of time woollen hosiery products were exempt. The appellant was not required to file intimation under Rule 174 of Central Excise Rules or a classification list under Rule 173(b) of Central Excise Rules. Woollen Hosiery products have upto the year 2000 remained exempted. It was thus a long standing practice which resulted in the bona fide belief that no duty was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintained or continued in any court, Tribunal or other authority for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of any such duties of excise which have been collected and which would have been validly collected if sub-section (1) had been in force at all material time. In reply, the learned Advocate submitted that if the demand of duty is hit by limitation, Section 110 of the Finance Act would not have any application. 5. We have considered the submission of both the sides. The learned Advocate for the Appellants have relied upon the decisions in Pee Jay Apparels (P) Ltd., Supra, in support of his submissions that extended period of limitation is not applicable as there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of any of the provisions of the Act or of the rules made there-under with intent to evade payment of duty. Thus for invoking the 5 years period, presence of one of the ingredients mentioned in proviso is a pre-requisite. If there is no fraud, collusion, etc. a notice for demanding excise duty for a period beyond six months and upto five years can not be issued. Provisions of Section 110 of the Finance Act, in our view do not validate the action to demand duty for extended period in absence of fraud, collusion, suppression of facts etc. What Section 110 validates is the notice issued or served for demanding duty on account of non payment, short payment, non levy, short levy or erroneous refund within a period of six months or five years, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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