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TMI Blog2009 (4) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... o further refinishing activities such as repacking them into product boxes after putting bar code stickers, swatch for identification of colour. All these activities of repacking, refinishing, putting bar code stickers was considered to be an activity amounting to manufacture as per para 4 of Chapter Notes to Chapter 62 of the Central Excise Tariff Act, 1985. Hence, Show Cause Notice was issued to the respondent for demand of Duty of Rs. 14,04,490/- for the period May, 2001 to January, 2003; for imposition of equal amount of penalty under Section 11AC and interest under Section 11AB of the Central Excise Act, 1944 and also for imposition of penalty under Rule 25 of the Central Excise Rules, 2002. The respondents have filed their reply to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Udyog Ltd. (7) I set aside the penalty imposed under Section 11AC. The penalty under Rule 25 of the Central Excise Rules is upheld. The duty liability should be worked out in the light of above order." 3. Revenue is aggrieved by such an order and has filed an appeal against the said order on the following grounds:- "(1) The Commissioner of Central Excise (Appeals-I), Bangalore, has erred in his order by restricting the demand of duty only to one year prior to the date of Show Cause Notice by not considering the findings of the Original Authority brought out at paras 6 to 12 and 16 of the OIO dated 17/21-10-2003, which clearly indicate that the activities carried out by the Assessee are clandestine in nature and their subsequent act in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended proviso to Section 11A of Central Excise Act, 1944. The extract of Section 11AC is reproduced hereunder- "Penalty for short levy or non levy of duty in certain cases. - where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons 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 an intent to evade payment of duty, the person who is liable to pay duty as determined under Sub-section (2) of Section 11A, shall also be liable to pay a penalty equal to the duty as determined." 4. The learned Departmental Representative would submit that the grounds of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the respondent and hence, these case-laws will clearly cover the issue in favour of the respondents for the order passed by the learned Commissioner (Appeals). 6. We have considered the submissions made at length by both sides and perused the records. Revenue's challenge against the Commissioner (Appeals)'s order is whether the respondent had suppressed the activity of production to the Revenue and if it is so, then, the demand of the duty was liable to be paid by the respondent for the entire period and not to the limited period of one year from the date of the show cause notice. 6.1 We find that the issue involved in this case is regarding the interpretation of provisions of Chapter Note 4 of Chapter 62. The said Chapter Note was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court and the interpretation, which is reproduced above, is in fact, in favour of the respondent herein, the issue is squarely settled in favour of respondent in this case. We find that the respondent has not challenged the amount of the differential duty affirmed by the learned Commissioner (Appeals). Hence, we do not wish to interfere with that portion of the order, which upholds the demand of the duty on the respondent within the period of one year from the issuance of the show cause notice. 6.4 We entirely agree with the learned Commissioner (Appeals) that the issue of application of Chapter Note No. 4 of Chapter 62 was a question of interpretation of law and hence, there cannot be any allegation of suppression of facts with an in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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