ORDER
Shri S.S. Sekhon, (J)
1. By Show Cause Notice, the Respondents were asked why duty should not be recovered on 9796.416 MT of Lime manufactured during the period 1.10.89 to 15.5.90.
2. The Commissioner observed that the Department was aware of the fact of manufacture of Lime as early as 1991, when data was furnished to Board, in respect of Lime manufactured by units as its dutiability was also in doubt. He held, there is no conscious withholding of information. Therefore the Show-Cause Notice dated 510.94 is barred by limitation.
3. Revenue has taken the following grounds in appeal
i) As regards dutiability of the product, it is seen from the case records, that the Chemical Examiner whose services had been requisitioned, after conducting a spot study has opined that the product coming out of the lime kiln is Quick Lime and the same can be taken out at the discharge end, if required.
ii) As regards the aspect of marketability, it is evident from para supra, that the product Lime, meriting classification under Chapter sub-heading 2505.60, is a final product as per the tariff description. In this context, Assistant Commissioner of Central Excise, Kozhikode Division vide his report C.No IV/16/6/94 dt 14.3.95 confirmed the marketability of the product in question after a spot verification by reporting that “the entire quantity of quicklime (Calcium Oxide), obtained is further used in the chain process. Some quantity of quicklime, said to be sweepings were kept in the polyethene bags and they are using it in effluent treatment plant. For the staple fibre Division they are purchasing the quicklime from the market for the same process of effluent treatment. From this it would appear that the product is marketable. But as per records, they are not marketing quicklime at present. This may be due to their own demand for the product for captive consumption. Quicklime available in the market are obtained by hearing limeshell (Calcium carbonate) at high temperature and subsequent cooling the same for packing, in a comparable process. It is also not the contention of the assessee that the product in question is of a transient nature with a short shelf life and one which is lacking stability, which attributes would h ave certainly diverted the said goods of its marketing potentiality, which is not the case in the instant issue. Hence in view of the foregoing, the marketability of the product is established beyond any iota of doubt.
iii) As regards the suppression it could be seen that the assessee had furnished a detailed write up in the pulp manufacturing process only on 21.12.90 vide their letter No. BKD 90-91 JEPC/665 dated 21.12.90 and further by their letter dt 21.1.91, they had furnished the data relating to the manufacture of lime, for the period from 1989-90 and 1990-91 for being submitted to the Board, in response to a Board’s reference. Hence, it is clear that the department became aware of the fact of manufacture of lime and internal use of the same without payment of duty and without observance of requisite Central Excise formalities only on 21.12.90 as per the record available, in as much as their main product namely pulp being exempted and by virtue of which fact the assessee had been exempted from filing Classification List and maintaining any Central Excise records. The duty sought to be imposed is from 28.2.86 to 15.90 only since the product is exempt from payment of duty vide Notification No. 106/90 dt 16.6.90. The unit had been under lookout during 1986-87 to 1989-90 (upto July ’89) to which period no action is warranted. However for the remaining period from 1.10.89 to 15.590 duty is demandable in as much as the fact of manufacture was suppressed and the product so manufactured having been used captively without payment of Central Excise duty proves the guilt of the assessee beyond doubt and hence five years period is available to the department.
4. We have heard both sides and considered the submissions and find—-
(a) When the dutiability of the entity was under dispute and was being studied by the department up to the level of Central Board of Excise & Customs and the department’s Chemical Examiner had visited the premises to study the process and this was in progress since 1991 and no evidence has been brought on record to allege any change in the nature of the entity, the issue of a demand under the Provisions of Section 11A(1) for the period 28.2.86 to 15.5.90 (which is limited in the appeal before us to the period (1.10.89 to 15.5.90) by a SCN dt 5.10.94 is barred by limitation.
5. In view of our finding, the appeal is rejected.