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TMI Blog2012 (12) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... t mentioned in the ER-I Returns - extended period cannot be applied for the recovery of non-duty paid and only the normal period of limitation would be applicable - penalty under Section 11AC since the criteria for invoking extended period under proviso to Section 11A(1) is identical to the criteria for imposition of equal penalty under Section 11AC and since extended period is not applicable, there would be no justification for imposition of penalty on the appellant under Section 11AC - duty demand would survive only for the normal limitation period. - E/1841-1842/2011 - A/635-636/2012-EX(BR)(PB) - Dated:- 29-5-2012 - Justice Ajit Bharihoke, Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri A.R. Madhav Rao, Advocate, for the Appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rances of the same attracted duty; and (d) Since the Appellant have not paid this duty, the same is recoverable along with interest. 1.1 It is in this background, that two show cause notices dated 29-5-2009 and 22-2-2010 were issued to the Appellant for recovery of non-paid duty amounting to Rs. 11,11,503/- and Rs. 8,93,741/- respectively for period from July 2008 to Jan. 2009 and Feb. 2009 to October 2009 respectively under provision to Section 11A(1), along with interest on this duty under Section 11AB and also for imposition of penalty on the Appellant company under Section 11AC and on Shri Atul Kumar Agarwal, Authorised Representative of the Appellant Company under Rule 26 of the Central Excise Rules, 2002. 1.2 The show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mean that it is marketable as even rubbish can be sold, that marketability mean selling of a commodity known to the commerce and which may be worthwhile to trade in, that applying this criteria for marketability, inspite of the amendment to Section 2(d) of the Central Excise Act, 1944 w.e.f. 10-5-2008 by adding an explanation to it providing that for the purpose of Section 2(d), the goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable and, hence, excisable goods, the zinc dross ash can not be treated as marketable, as there is no evidence that the zinc dross and ash are items worthwhile to trade in and are a commodity known to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the explanation added to Section 2(d) w.e.f. 10-5-2008 which creates a legal fiction, that taking into account, the amendment to Section 2(d) w.e.f. 10-5-2008, the Hon ble Allahabad High Court in the case of Hindalco Industries Ltd. v. Union of India reported in 2009 (243) E.L.T. 481 (All.) has held that insertion of Explanation to Section 2(d) of the Central Excise Act provides for a deeming fiction, according to which any material capable of being sold shall be deemed to be marketable and taking into account this explanation to Section 2(d) of the Central Excise Act, Hon ble Allahabad High Court has held that the Aluminium dross is excisable, that extended period for confirmation of duty demand has been correctly invoked and penalty un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing subject to duty of excise. With effect from 10-5-2008, an explanation has been added, which provides that for the purpose of this clause, the goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. Thus, the explanation creates a legal fiction by which any goods which are capable of being bought or sold for some consideration are deemed to be marketable. Taking into account this provision, the Hon ble High Court in the case of Hindalco Industries Ltd. (supra) has held that explanation to Section 2(d) creates to a legal fiction by which any goods which are capable of being bought and sold for a consideration shall be deemed to be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ER-6 returns regarding Cenvat credit taken and utilized they can not be accused of having suppressed the fact regarding manufacture and sale of zinc dross ash from the department, even if the production and sale of zinc dross/ash was not mentioned in the ER-I Returns. In view of this, keeping in view the principles laid down by the Apex Court on the question of the applicability of proviso to Section 11A(1) in its judgments in the cases of Padmini Products v. CCE reported in 1989 (43) E.L.T. 195 (S.C.); CCE, v. Drugs Leminents reported in 1989 (40) E.L.T. 276 (S.C.) and Continental Foundation Joint Venture v. CCE, Chandigarh reported in 2007 (216) E.L.T. 177 (S.C.), we are of the view that extended period cannot be applied for the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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