9911796707
TMI Blog2025 (4) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... tc., falling under Chapter 15 of the First Schedule to the Central Excise Tariff Act, 1985. During the course of manufacture of the said final products, Refined Bleached Deodorized Palm Stearin (RBD), Palm Stearin and Hydrogenated Palm Stearin (HPS) emerged as by-products, which the appellants use to clear from their factory premises, without payment of Central Excise Duty. Non-payment of Central Excise Duty during the disputed period on those by-products was objected to by the department on the ground that the said by-products are excisable commodity and are liable to Central Excise Duty on their removal from the factory premises. On the basis of such understanding, show cause proceedings were initiated by the department, seeking for confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under dispute and against the order passed by the Tribunal in the case of Jocil Ltd. (supra), classifying the same under Chapter 15, Revenue has filed the Civil Appeal before the Hon'ble Supreme Court, which was disposed of vide judgement dated 15.12.2010 [2011 (263) E.L.T. 9 (S.C.)] in favour of Revenue, holding that the product should be classifiable under Chapter 38. Thus, learned Senior Counsel submitted that as a result of resolution of the classification dispute by the Hon'ble Supreme Court, the appellants had started paying Central Excise duty on removal of the said by-products after the period April 2011 suo moto. With regard to the impugned order passed in the present case, he has submitted that extended period of limitation canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the goods under Chapter 15, which is in consonance with the circular dated 03.12.2002 (supra). With regard to the dispute in classification of the subject goods, we find that this Tribunal, in the case of Gokul Enterprises (supra) and Jocil Ltd. (supra) has taken the view that the product should appropriately be classifiable under Chapter 15. However, the classification dispute in the case of Jocil Ltd. (supra) was differed with by the Hon'ble Supreme Court in the case of Jocil Ltd. (supra), by holding that the Palm Stearin to be classifiable under Chapter 38. Since, the classification issue was finally resolved by the Hon'ble Supreme Court in the case of Jocil Ltd. (supra), the appellants had started paying the Central Excise duty, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Act or of the rules made thereunder with an intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if, for the words "one year", the words "five years" were substituted." 7. On reading of the above quoted statutory provisions, it transpires that any amount, if lawfully required to be recovered, then the same can be given effect to, by way of issuance of show cause notice within the normal period of one year from the relevant date. In other words, issuance of notice within one year is the rule. However, an exception has been carved out for consideration of such normal period (one year), in the proviso appended to sub-section (1) in Section 11A ibid, providing that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r words, there was proper documentation in support of generation of such by-products in the manufacturing process and removal of the same from the factory premises. Thus, under such circumstances, we are of the considered opinion that the extended period of the limitation cannot be invoked for confirmation of the adjudged demands on the appellants inasmuch as there is no element of suppression, wilful misstatement, fraud etc., on the part of the appellants, with an intent to evade payment of Central Excise duty. We find that the department had not specifically brought out any evidence to show that non-payment of Central Excise duty by the appellants was due to the reason of any fraudulent activities, with intent to defraud the Government Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Chapter 15 and not under Chapter 38 therefore. The bonafides of the appellant, therefore, cannot be doubted. In these circumstances, we do not find any merit in invocation of extended period of limitation to demand Central Excise duty, interest and to impose penalty under Section 11C. The Show Cause Notice is therefore, set aside on account of limitation. The appeal is allowed." 9. In view of the forgoing discussions and analysis, we do not find any merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands by invoking the extended period of limitation. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellants on the ground of limitation, with consequential relief, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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