Customs, Excise and Gold Tribunal - Delhi
Neyveli Lignite Corpn. Ltd. vs Collector Of Central Excise on 3 September, 1991
Equivalent citations: 1992(58)ELT76(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. In both these appeals, common issue of facts and law is involved. Hence, they are taken up together for disposal as per law.
Appeal No. 2900/88-C
2. This appeal arises from order-in-appeal dated 17-12-1987 passed by the Collector of Central Excise (Appeals) Madras. The question that arises for consideration in this appeal is the grant of benefit of exemption from payment of duty as per Notification No. 179/85-C.E., dated 1-8-1985 as amended by Notification No. 78/86-CE.
The appellants Neyveli Lignite Corporation, a Government of India Enterprise, is producing lignite as well as Agglomerated Lignite which falls under sub-heading 2702.00 and claimed exemption under Notification No. 179/85 as amended by Notification No. 78/86 which exempts goods falling under sub-heading 2702.00.
3. A show cause notice dated 27-2-1987 was issued by Superintendent of Central Excise, Virudhachalam under Section 11A of the Central Excises and Salt Act, 1944 read with Rule 9(1) of Central Excise Rules, 1944 demanding a duty of Rs. 19,30,227.65 P. on Raw Briquette Chips and lignite dust alleged to have been cleared by the appellants from 1-9-1986 to 31-1-1987 without payment of duty. It is further alleged that the appellants are holder of L-4 licence No. 4 of 75 in their Briquetting and Carbonisation plant manufacturing Raw Briquette chips (RB Chips) and lignite dust. It is stated that raw briquette chips which are obtained in the B & C Plant after the process of crushing and drying raw lignite but before the process of carbonisation, retain the characteristics of lignite and hence are classifiable under sub-heading 2702.00 of CET Act, 1985. It is further stated that Notification No. 179/85 as amended by Notification No. 78/86, exempts goods falling under sub-heading 2702.00 if only they are manufactured in a mine whereas R.B. chips and lignite dust are manufactured in the Briquetting and Carbonisation plant which is licensed under the Factories Act and hence R.B. chips and lignite dust cannot avail the benefit of exemption under the above notification and accordingly, chargeable to duty at 12% ad val.
4. The appellants sent a reply on 5-3-1987 by which they have contended that they received lignite from mines in B & C plant for producing the end products of coke and Tar Chemicals. They contended that in the process, lignite dust is collected from spillages of conveyors and other equipments and stored as heaps. This dust is sold to outside parties. They further contended that it does not have the properties of lignite especially moisture and cal. value. It is a waste product received by B & C plant and it is not equal to raw lignite as recovered from mines. Hence they claimed exemption under the Notification No. 179/85 as amended by Notification No. 78/86 and sought exemption from payment of duty. They further contended that with regard to raw briquette chips, this is a semi coke product having been dried to 8% - 11% from 54% and carried out pressurising the lignite and the properties are completely far from lignite but closer to coke properties like physical form, cal. value etc. They contended that the chemical analysis are different from lignite but closer to coke and, therefore, to be treated as semi coke. Hence they claimed exemption under the said notification.
5. The Assistant Collector, after hearing the appellants, rejected their contention and held that B & C plant is located in the N.L.C. complex and the same is licensed under the Factories Act and, therefore, the goods under Central Excise Control cannot be considered to be as part and parcel of NLC Mines. He has further held that if it were to be so, then there would be no reason to have a separate licence for the B & C Plant, therefore, he held that the products R.B. chips and lignite dust are classifiable under sub-heading 2702.00 of CET 1985 and not being eligible for exemption under Notification No. 179/85 as amended by Notification No. 78/86-C.E.
6. The Collector (Appeals) has also rejected their appeal by upholding the order of the Assistant Collector. The Collector has held that the definition of 'mine' includes any excavation and further includes any premises or parts thereof, in, or adjacent to, where any process ancillary to the getting, dressing or preparation for sale of minerals is carried on. He has held that Briquetting and Carbonisation operations cannot be called operations ancillary to dressing or sale of lignite either in mineral form or in agglomerated form. Therefore, he held that the B & C plant is not a premises covered by the definition of mine under Notification No. 179/85 as amended and hence chips and dust of lignite manufactured in B & C plant are not covered by the duty exemption and on that ground, confirmed the order-in-original.
Appeal No. 3803/89-C
7. In this appeal, a show cause notice was issued on 2-8-1988 by the Collector of Customs and Central Excise, Tiruchirapalli, Tamil Nadu to the appellants by which a demand of Rs. 19,03,622.40 P. for clearances of excisable goods during the period 1-4-1986 to 31-8-1986 was raised under Rule 9(2) of Central Excise Rules, 1944 read with proviso to Section 11A(1) of Central Excises and Salt Act, 1944. They were also asked why a penalty should not be imposed on them under Rule 173Q of Central Excise Rules, 1944. The allegation in the show cause notice is the same as in the earlier appeal. As regards the goods cleared under sub-heading 2702.00 of CET not being eligible for exemption under Notification No. 179/85-C.E., dated 1-8-1985. It was further contended in this show cause notice that according to Col. X of Clause (j) of Section 2 of Mines Act, 1952, a 'mine' includes premises or part of the premises thereof, in or adjacent to and belonging to a mine on which any process ancilliary to the getting, dressing or preparation for sale of minerals or of coke is being carried on, unless such area is exempted by Government of India notification in the official gazette. It was further alleged in the show cause notice that under Section 83(1) of the Mines Act, 1952, Government of India had issued a Notification No. S.O. 3699 dated 22-11-1965 giving exemption to the Briquetting and the Carbonising Plant of the appellants from the operation of the provisions of the Mines Act, 1952 and hence the raw briquette chips and lignite dust manufactured in the Briquetting and Carbonising plant of the appellants will not be covered by the exemption Notification No. 179/85-C.E., dated 1-8-1985 and they were chargeable to duty at 12% adv. It was further alleged that the appellants had paid duty on lignite powder till 1-4-1986 and on raw briquette chips till 3-4-1986 and had stopped the payment of duty and had availed of exemption under the said notification on raw briquette chips and lignite dust totally valued at Rs. 1,58,63,520.86 P. (Rupees one crore, fifty eight lakhs, sixty-three thousands and five hundred twenty and paise eighty-six only) wrongly and irregularly through misstatement contrary to the provisions of the said notification and had cleared raw briquette chips and lignite dust chargeable to duty at 12% adv without payment of duty from 1-8-1986 to 31-8-1986 and hence they were liable to pay the duty amount as indicated. It was further alleged that the appellants had neither filed the declaration to avail of the benefit of the exemption for raw briquette chips and lignite dust falling under heading 2702.00 nor claimed exemption for the said goods in the classification list filed by them under the said notification. It was further contended that the appellants had suppressed wholly the fact that the Briquetting and Carbonising plant had long been exempted from the operation of the provisions of the Mines Act, 1952 and cleared excisable goods viz. raw briquette chips and lignite dust which are not eligible to the benefits, accorded to them, by Notification No. 179/85, dated 1-8-1985 without payment of duty due thereon during the period 1-4-1986 to 31-8-1986. Hence it was alleged that they had rendered themselves for action for contravening the provisions of Rule 9(i), 52-A, 53, 173-B, 173-C, 173-G and 174-A punishable under Rule 9(2) read with the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944 for misstatement, irregular availment of the benefits of the Notification No. 179/85, dated 1-8-1985 and the consequential non-payment of duty on the clearances of the said goods.
8. The appellants have contended that the activity fell within the definition of Mine as per Section 2(j) of Mines Act, 1952 and that they were exempted from paying the duty as per the notification in question. They further contended that the Notification SO-3699, dated 22-11-1965 was issued for the purpose of labour welfare and safety and not for the purpose of operations themselves carried on in the Mines and, therefore, would not vitiate, alter or remove the meaning and character of the Briquetting and Carbonising plant from being a 'mine'. They have further contended that exemption Notification No. SO-3699, dated 22-11-1965 issued under Section 83 of the Mines Act, 1952 did not take out the plant of Briquetting and Carbonising plant from the scope of definition of Section 2(j) of the Mines Act. They further contend that Section 83 of the Mines Act, 1952 merely exempts absolutely or subject to condition in mind 'from the operation' of the provisions of the Act and consequently to continue to hold the benefit subject to the coverage of exemption. They contend that the notification issued under Section 83 of the Act cannot exclude the act itself. They contend that the Collector has erred in drawing an inference from the mere fact that the appellants had taken licence under the Factories Act, 1948, which were due to two circumstances -
(a) that when the notification under Section 83 was issued, Section 2(j)(ix) of the Mines Act, 1952 read differently. Consequently, licence under the Factories Act, 1948 became necessary.
(b) Under Section 2-K of the Factories Act, 1948, a notification excludes operations of the Mines Act, 1952 and have the effect of inviting the definition of factory. They contended that the Collector should have appreciated that the exclusion of the operation of the Mines Act, 1952 or the invitation of the contract of the definition of Section 2K of the Factories Act, 1948 have no relevance to the language of the Notification No. 179/85, dated 1-8-1985, which was issued under Rule 8(1) of Central Excise Rules, 1944 which adopted and incorporated the definition under Section 2(j) of the Mines Act, 1952 and in this view only amended provisions of the Mines Act, 1952, after the Central Act 1942 of 1983, became relevant. They further contended that there was no suppression of fact at the material time and hence the extended period of limitation under proviso to Section 11A may not be extended in this case to confirm the duty. They contended that they stopped paying duty w.e.f. 4-4-1986 and as the notice was issued well after six months, it was, therefore, barred by time.
9. They have also given the technical write up regarding the process of manufacture in the Briquetting and Carbonisation plant which in brief are as follows -
(a) a raw lignite is mined in the M/s. Neyveli Lignite Corp. are obtained by this plant and it is crushed, dried using steam, compressed to solid briquettes in high process extrusion process and carbonised at a temperature of 600 - 650 centigrade. Various organic chemicals are required from the gases and tar during the high temperature formation process.
(b) It is given in the technical literature that the contaminated test which is obtained from the spillage from conveyors and other material handling equipments and from processes during the briquetting process and which are not suitable for recycling are also sold in the market as fuel. They have also given in the technical write up that some broken and crumbled small chips of briquettes which are not fit for re-processing are also sold in the market.
(c) The cut raw briquettes after processing, yield lignite coke which is chemically called licko which are marketed.
(d) During the process, they obtained organic chemicals like 1. Carbolic Acid 2. Orthocrsol 3. Metaparcresol 4. Xylenol 5. Multivalent phenol 6. Dephenolised 7. Tar 8. Tar sludge.
(e) the product lignite coke obtained from carbolic acid is called Liko plus 15-M size coke fines and 15 MM in the product handling plant and discharged to consumers.
10. The learned Collector, after hearing the parties, rejected the appellants claim and has confirmed the duty demanded in the show cause notice. However, he has accepted the appellant's contention that the question whether the Briquetting and Carbonising plant in their complex is a mine or not, it is to be resolved by the Government through issue of a certificate signed by the Secretary to the Govt. under powers conferred on him under Section 82 of the Mines Act. However, he noted that the appellants did not produce the said certificate despite grant of reasonable time and the delay in regard to the issuance of the certificate shows that the Central Govt. has no such sanction to withdraw the exemption granted to the briquetting and carbonising plant from the operation of the provisions of the Mines Act in terms of the Notification No. SO-3699, dated 22-11-1965 which still remains on the Statute Book without being rescinded. He has further held that the Govt. not only omitted the word 'notice' from the Act, but has also amended the entire sub-clauses of 2(j) and so the appellants cannot rely on the deletion of word 'notice'. Therefore, the Collector has held that he was satisfied that Briquetting and Carbonising plant is not a 'mine' within the definition of Section 2(j) of the Mines Act, 1952 and accordingly, the raw briquette chips and lignite dust manufactured and cleared by the appellants from the B & C plant are not entitled to the benefits of exemption granted under Notification No. 179/85-C.E., dt. 1-8-1985 and were liable to pay the duty at the rate of 12% adv. for the clearances made by them. He has held that the appellants had suppressed the facts of the claim of exemption with a view to avoid payment of duty on the goods and hence the larger period could be invoked to confirm the demand under the proviso to Section 11A. The entire amount of duty was confirmed and a penalty of Rs. 5,000/- was imposed under Rule 173Q of the Central Excise Rules, 1944.
11. Shri Natarajan, arguing for the appellants, submitted that there is no dispute that lignite dust which was mined by the appellants was also marketed but at the same time the excavated lignite dust was also taken to the briquetting and carbonisation plant which was registered under the Factories Act. It is his contention that the B & C plant is also a part of the mine and the ultimate product which comes out from the B & C plant i.e lignite coke was classified under Chapter heading 2702.00 and it was entitled for exemption from payment of duty under Notification No. 179/85, dated 1-8-1985. The said notification exempted goods which fall under sub-heading 2702.00 which had been manufactured in a mine. The explanation to the notification states that expression 'mine' has the meaning assigned to it in clause (j) of Section 2 of the Mines Act, 1952. It is his contention that the B & C plant is a mine and the goods are manufactured in the mine and hence, exempted from payment of duty. He further contended that notification did not contemplate that the Mines Act should be operative but had only taken the meaning of expression 'mine' to be assigned as in clause (j) of Section 2 of the Mines Act. The explanation to the notification, therefore, did not imply that the exemption would be granted only if the Mines Act was in operation and not otherwise. The explanation to the notification was only trying to restrict the meaning of expression 'mine' to be as given in the Mines Act and not to go beyond it. It is his contention that the Central Govt. by its Notification SO-3699, dated 22-11-1965 issued under Section 83 of the Mines Act, had exempted the appellants from the operation of the Mines Act which did not mean that the appellants ceased to be a mine. It is his contention that the expression 'mine' has to be viewed only from the restrictive definition of mine given in Section 2(j) of the Mines Act and not a phased or extended meaning of mine or restricted meaning of mine as can be found in any other subject or book for authority. It is his contention that the operation of the Factories Act to the B & C plant would not necessarily take out the said plant from the ambit of the mine or the definition of the mine as the definition of mine given in the Mines Act is vast enough to include the operation done in the plant to be a part of the mine as per clause (xi) of Section 2(j) of Mines (Amendment) Act, 1983. Sh. Natarajan further arguing on the expression "from the operation of the provisions of the Act" which the Notification SO-3699, dated 22-11-1965 issued under Section 83 of the Mines Act, 1952, refers to, submitted that this expression did not mean that the Mines Act was not at all applicable to the appellant's case. He further drew support from the definition of the word 'operation of law' as appearing in "Words & Phrases" Vol. 29A, published by West Publishing Co. appearing at page 466 is noted below -
"Operation of law means the practical effect of what the law is intended to be on the subject.
American Bitumuls & Asphalt Co. v. US Cust. Ct 146 F. Supp 703, 713, 714 In its usual signification, 'operation of law' is generally applicable to matters involving title and refers to situations in which rights, and sometimes liabilities, are created without action by parties; it is said also to mean the obligation of law; or its practical working and effect.
American Bitumuls & Asphalt Co.\. US Cust. 146 F. Supp 703, 713, 714"
He also relied on the expression 'operation' as appearing in the 'Corpus Juris Secundum - A complete Restatement of the Entire American Law, Vol. 67 published by West Publishing Co., appearing at pages 876 to 877. This argument is in support of his contention that the Central Govt. exempting the provisions from the operation of the Mines Act did not in any way, render the Mines Act inoperative and that the appellants still continued to be a mine and was entitled to claim exemption from payment of duty for goods being manufactured in all its plants within its precincts.
12. He also made submissions to bring out distinction from the term "exclusion" and "exemption" and relied on the ruling rendered by the Supreme Court in the case of A.V. Fernandez v. State of Kerala (AIR 1957 SC 657). In particular, he referred to para 41 of the report which is noted below -
"There is a broad distinction between the provisions contained in the statute in regard to the exemptions of tax or refund or rebate of tax on the one hand and in regard to the non-liability to tax or non-imposition of tax on the other. In the former case, but for the provisions as regards the exemptions or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they areprima facie liable to tax and the only thing which the dealer is entitled to in respect thereof is the deduction from the gross turnover in order to arrive at the net turnover on which the tax can be imposed.
In the latter case, the sales or purchases are exempted from taxation altogether. The legislature cannot enact a law imposing or authorising the imposition of a tax thereupon and they are not liable to any such imposition of tax. If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the Act at all. The very fact of their non-liability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed."
He also relied on the ruling rendered by the High Court of Gujarat in the case of Mehta Bros. (Lobelia) Surat v. The State of Gujarat (43 Sales Tax Cases 208). In support of his contention that where a single section of an Act of Parliament is introduced into another Act, it must be read in the sense which it bore in the original Act from which it is taken.
13. He also relied on the ruling given by the Gujarat High Court as rendered in the case of Hind Engineering Co., Rajkot v. Commissioner of Sales-tax, Gujarat - (31 STC 115) which ruling is also on the same point noted above.
14. Sh. L.C. Chakraborti arguing for the Revenue, submitted that the Collector was justified in rejecting the appellants' case as the activity in B & C plant in the appellants' factory was not a mining activity. Referring to clause (xi) of Section 2(j) of Mines Act which reads "in terms in or adjacent to and belonging to a mine on which any process ancillary to the getting, dressing or preparation of sale of minerals or of coke, is being carried on;" Shri Chakraborti pointed out that what was mined was lignite dust which was marketable and was being marketed also. He submitted that the activity in the B & C plant cannot be considered as "any process ancillary to the getting, dressing or preparation for sale of minerals or of coke," as the technical literature submitted by the appellants clearly indicated that it was a heat plant wherein several processes were being carried on and as a result, several by-products were coming out which were also excisable. He submitted that the technical write-up clearly indicated that the goods which were manufactured in the B & C plant cannot be considered as a mining activity and will not fall within the scope and definition of mine as given in Section 2(j) of the Mines Act. He submitted that the B & C plant was located far away from the mine and hence it did not make it a part of the mine.
15. On a careful consideration of the submissions made by both the sides and also on perusal of the entire materials placed before us, it has to be seen as to whether the goods manufactured in B & C plant is to be considered as goods manufactured in the mine and the expression 'mine' to be restricted to the definition given in Section 2(j) of the Mines Act, 1952. The Notification No. 179/85, dated 1-8-1985 as amended is reproduced below -
"Exemption to goods produced in Mines -
In exercise of the powers conferred by Rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods falling under sub-heading Nos. 2505.00, 2702.00, 2703.00, 2705.00, 2709.00, 2711.21, 2714.90 or 7101.39 as the case may be, of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and manufactured in a mine, from the whole of the duty of excise leviable thereon under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944).
Explanation. - In this notification, the expression 'mine' has the meaning assigned to it in clause (j) of Section 2 of the Mines Act, 1952 (35 of 1952).
Notification No. 179/85-C.E., dated 1-8-1985 as amended by Notification No. 78/86-C.E., dated 10-2-1986 and No. 439/86-C.E., dated 23-10-1986 and No. 127/88-C.E., dated 1-3-1988".
16. As can be seen from this notification, it exempts goods falling under subheading 2702.00 and the same is manufactured in a mine. The explanation to this notification clarifies that the expression 'mine' has the meaning assigned to it in clause (j), Section 2 of the Mines Act, 1952. This means that the expression 'mine' has to be restricted to the definition given in the Mines Act but, the notification does not state that the Mines Act should be operative for the purpose of grant of exemption. The operation of the Mines Act could be suspended by an exemption issued by a notification by the Central Govt. As per Section 83 of the Mines Act, the Central Govt. by Notification No. SO-3699, dated 28-11-1965 has exempted parts of a mine from the operation of provisions of the Mines Act. In Sr. No. 1-B of the Schedule to the said notification, it is mentioned, "all coke plants featuring in part of the mines which have arrangements for recovery of by-products" are exempted from the operations of the Mines Act and in Sl No. 3 of the said Schedule is mentioned, "briquetting and carbonisation plant of M/s. Neyveli Lignite Corp. However, Section 82 of the Mines Act states that if any question arise as to whether any excavation or organic (or premises in or adjacent to and belonging to a mine, which any process ancilliary to the crushing, dressing or preparation for sale of minerals or of coke is being carried on) is a mine within the meaning of this Act, then the Central Govt. may decide the question and a certificate signed by Secretary to the Central Govt. shall be conclusive to the point.
17. The learned Collector in order-in-original in appeal No. 3803/89-C has observed that the appellants, despite their promises, have not been able to produce a certificate signed by Secy. to Govt. under the powers conferred on him under Section 82 of the Mines Act to consider B & C plant as part of a mine. This observation of the learned Collector is correct and we uphold the same, for the reasons noted below.
18. The appellants have not produced the said certificate till date to consider the B & C plant to be a part of the mine as contemplated under the definition of 'mine' as appearing in sub-clause (xi) of Section 2(j) of the Act. The question whether B & C plant is a part of a mine has to be decided only by a Secy. to Central Govt. as per Section 82 of the Mines Act. Section 82 of the Mines Act has made it very clear that the certificate shall be conclusive to the point. Therefore, as Section 82 lays down, that the question of B & C plant to be considered as a mine, is vested only with the Secy. to Govt. who is competent to decide conclusively by issue of a certificate on this point and the appellant not having produced the said certificate to that effect, the appellants contention that B & C plant is a part of mine, cannot be considered by us. As it will not be open for us to give a finding that B & C plant is part of the mining activity as per the definition of mine occurring in Section 2(j) of the Mines Act as the Mines Act itself lays down in Section 82 that it is the Secretary to the Central Govt. who shall decide this point conclusively and his decision being final.
19. Sh. Natarajan relied on the ruling of Mehta Brothers (supra) and contended that where a single Act of Parliament is introduced in another Act, it must be read in the sense which it bore in the original Act. This ruling will not be of any help to him as the Mines Act itself has clarified in Section 82, that it is the Secy. to the Central Govt. who will decide the issue pertaining to the point as to whether any excavation or working or premises in or adjacent to and belonging to a mine on which any process ancillary to the getting, dressing or preparation for sale for minerals or of coke is being carried on, is a mine within the meaning of this Act. Sh Natarajan has relied on the Notification No. 3699, dated 22-11-1965 and the schedule given thereto under Section 83 of the Mines Act and has pointed out that Sr. No. 1-B and Sr. No. 3 to the Schedule mentioned of coke plants forming part of Mines which have arrangements for recovery of by-products and also to the briquetting and carbonisation plant of M/s. Neyveli Lignite Corp. appearing in the said Sr. No. respectively and submitted that this notification issued under Section 83 is sufficient to conclude that the Central Govt. can conclusively decide that B & C plant of the appellants is also coming within the mining activity. This is not the correct position as the provisions of Sections 82 and 83 are independent. The question of declaring the activity in B & C plant has to be by issue of a certificate signed by Secretary to the Central Govt. and such a issue of certificate is conclusively on the point. Section 82 in the present case has not been complied with and there is no issue of a certificate by the Secy. to Central Govt. to decide and determine whether B & C plant should be brought within the ambit of the Mines Act. Section 83 grants power to the Central Govt to exempt any mine or part of a mine from the operation of the Mines Act. As per this section, the Central Govt. has exempted the appellant from the operation of the Mines Act to the B & C plant but however, the Central Govt. has not declared by issue of a certificate that the activity or process ancillary to the getting, processing or preparation for sale of minerals or of coke being carried on in the B & C plant is a mine. This issue of a certificate is a pre-condition and thereafter, the exemption of its operation would arise. In the absence of any such issue of a certificate and to conclude from the Notification No. SO-3699, dated 22-11-1965, that the Central Govt. has considered the B & C plant to be a mine will not be proper and correct. It will be for the appellants to approach the Central Govt. for issue of such a certificate. The learned Collector had granted sufficient time for obtaining such a certificate although agreeing with the appellants contention that B & C plant would squarely fall within the precincts adjacant and belonging to NLC on which the process of preparation for sale of coke is being carried on, by virtue of a notification issued under Section 83(1) of the Mines Act.
20. The learned Collector has observed that the Notification No. SO-3699, dated 22-11-1965 having excluded B & C plant from the operation of the Mines Act would all the more, justify B & C plant from not being considered as a mine. This finding of the learned Collector is also not without substance. As it is for the Central Govt. to decide whether this activity is a mining activity. The Central Govt. without issuing a certificate under Section 82 of the Mines Act, who by a specific notification under Section 83, declaring that 'B & C plant' to be exempted from the ambit of the Mines Act, it could only mean that the Central Govt. is not willing to consider 'B & C plant' as a mine.
21. The 'B & C plant' is registered under the Factories Act and the entire activity of the B & C plant has been given in the technical write up, thus it would strengthen the proposition that the activity in 'B & C plant' is more of nature of production of goods in a factory and not in a mine. The excavation of minerals from the appellants mine are being directly marketed. The said minerals are also being taken to this B & C Plant for several other processes as given in the technical write up to manufacture lignite coke and other by-products. This activity is not process ancillary to the getting, dressing or preparation for sale of minerals as the minerals are capable of being marketed without even this process. However, it is not for us also to presume as to whether the activity in B & C plant is a mining activity under clause (xi) of Section (j) of Section 2 of Mines Act in view of the provision of Section 82 of the Mines Act. There is no merit in this appeal.
22. The appellants in Appeal No. 3803/89-C have contended that the demands are barred by time. The show cause notice was issued by Collector on 2-8-1988 for the clearances of R.B. chips and lignite dust without payment of duty during the period 1-4-1986 to 31-8-1986 for a duty amount of Rs. 19,03,622.47 under Rule 9(2) of Central Excise Rules read with Section 11A(1) of the Central Excise Act. The show cause notice clearly states that the appellants had paid duty respectively on lignite powder till 1-4-1986 and on briquette chips till 3-4-1986 but stopped from payment of duty and availed of the exemption under Notification No. 179/85, dated 1-8-1985 on raw briquette chips and lignite dust by wrongly and irregularly through mis-statement contrary to the provisions of the Notification No. 179/85, dated 1-8-1985. The learned Collector has held that the appellants had tactfully suppressed the facts for the purpose of the sole purpose of avoiding duty payments on the goods and hence confirmed the demands under the proviso to Section 11A(1) of Central Excises and Salt Act, 1944. We have to hold that this demand is barred by time as the Department on the same facts had issued show cause notice on 27-2-1987 for the period covering 1-9-1986 to 31-1-1987 which is subject matter of appeal No. 2900/88-C. The Department had initiated proceedings as far back as on 27-2-1987 and hence the demands pertaining to the period 1-4-1986 to 31-8-1986 could have been also raised by the Department. It cannot be alleged that the Department was unaware of the clearances for this period, when parallel proceedings had been initiated by Superintendent of Central Excise for the subsequent period. Therefore, the demands raised in E/A. No. 3803/89-C are hit by limitation and are not enforceable.
23. The demands raised in the show cause notice dated 27-2-1987 for the period covering 1-9-1986 to 31-1-1987 which is subject matter in appeal No. 2900/88-C are not hit by limitation and there is no plea of time bar also and hence the duty demand for this period for a sum of Rs. 19,30,227.65 are hereby confirmed.
24. We, therefore, uphold the order of the lower authorities in not granting the benefit of Notification No. 179/85-C.E., dated 1-8-1985 as amended by Notification No. 78/86. The demands raised in E/A 2900/88-C are confirmed. The demands raised in E/A 3803/89-C arc set aside as time barred.
The appeals are disposed of on the above terms.