IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 14.12.2011 CORAM THE HONOURABLE MR.JUSTICE D.MURUGESAN AND THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN C.M.A.No.110 of 2010 AASIM Industries (P) Ltd., 88 Keezhamanambedu Village Tiruvellore 602 107 .. Appellant/Appellant -vs- Commissioner of Central Excise Chennai II Commissionerate MHU Complex, Nandanam Chennai 600 035 .. Respondent/Respondent Memorandum of Grounds of Civil Miscellaneous Appeal under Section 35G of the Central Excise Act, 1944 against the Final Order No.E/1240/01 dated 22.08.2008 passed by the Customs, Excise and Service Tax Appellate Tribunal, Southern Zonal Bench, Chennai against the order of the Commissioner of Central Excise (Appeals) Chennai-34 dated 10.10.2001 and made in A.No.59/2001 (M-II) against the order of the Joint Commissioner, Chennai-II, Commissionerate dated 26.12.2000 and made in C.No.V/15/70/98. For Appellant :: Mr.Arun Kurian Joseph For Respondent :: Mr.P.Mahadevan Senior Counsel for Central Govt., JUDGMENT (Judgment of the Court was delivered by D.MURUGESAN, J.) This civil miscellaneous appeal raises the following substantial question of law, namely, as to whether the Revenue would be entitled to demand the payment of duty beyond the period of six months from the date it became due under the provisions of the Central Excise Act and the Rules? 2. The appellant is engaged in the manufacture of mineral water. On 14.2.98, the officers attached to the Chennai V Division, Chennai https://hcservices.ecourts.gov.in/hcservices/ I Commissionerate visited the premises of the appellant and noticed that another unit namely, M/s NMZ Industries Private Limited had been functioning in the said premises. The said M/s NMZ Industries is also engaged in the conversion of ground water into mineral water for being stored in the stainless steel tanks. M/s NMZ Industries cleared the mineral water from the stainless steel tank to the appellant by raising proper invoices and delivery challans and both the units were not registered with the Central Excise department. According to the officers attached to the Division in question, in terms of Chapter Note 3 of Chapter 22 of the Central Excise Tariff Act, mineral water bearing a brand name will attract duty at the rate of 18 per cent and according to Note 2 of the said Chapter, the packing of mineral water from bulk packs to retail packs or any other process, that is labelling or re-labelling of container shall amount to manufacture. As the appellant had cleared the mineral water classifiable under CH 2201.90 from 1.4.97 to 15.7.97 without payment of duty and without observing the Central Excise procedures, a show cause notice was issued for contravention of the provisions of Section 6 of the Act read with Rule 174 of the Rules. The show cause notice was dated 11.8.98. An explanation was offered and ultimately the order-in-original was passed on 26.12.2000 confirming the demand and also imposing penalty. 3. This order was questioned by the appellant before the Commissioner of Central Excise (Appeals). By order dated 10.10.2001, the Commissioner found that the show cause notice is time barred and the invokation of the extended period is not applicable to the facts of the case. The said finding was rendered on the basis that the demand should have been made in a period of six months from the date when the payment was due and consequently allowed the appeal after setting aside the order-in-original. 4. This order was taken on further appeal to the Customs, Excise and Service Tax Appellate Tribunal by the Revenue and by the impugned order, the appeal filed by the Revenue was allowed on merits. Hence, the present civil miscellaneous appeal. 5. We have heard the learned counsel for the appellant and the learned counsel for the respondent. 6. The only question that arises for our consideration is that inasmuch the finding of the Commissioner of Central Excise (Appeals) holding that the show cause notice and the consequential order are time barred, as the show cause notice was issued beyond the period of six months and the said finding has not been set aside by the CESTAT, for the simple reason that it was not even raised by the Revenue, can the CESTAT go into the merits of the case and give a finding on that issue. The issue is not res integra, as the Apex Court in the https://hcservices.ecourts.gov.in/hcservices/ judgment in Indian Refrigeration Industries v. Commissioner of Central Excise, Delhi, 2010 (255) E.L.T. 491, while setting aside the order of demand, in paragraph 16, has observed as follows: "Admittedly, in the present case, show cause notice was issued on 4th March, 1980 i.e. much beyond the period of six months as provided under clause (1) of Rule 10 of the Rules. Extended period of limitation had not been invoked in the present case." 7. In the case on hand, as there is a finding by the Commissioner of Central Excise (Appeals) that the extended period of limitation is not applicable to the facts of the case, the CESTAT ought not to have gone into the merits of the case for the simple reason that it was not even raised by the Revenue. Accordingly, we answer the substantial question of law in favour of the appellant by holding that there cannot be a demand beyond the period of six months from the date it became due in terms of clause (1) of Rule 10 of the Central Excise Rules. Nevertheless, the question as to whether the extended period of limitation had been invoked or not is a mixed question of fact and law, the CESTAT would be entitled to consider that question. Since the CESTAT has not considered the said question, while answering the substantial question of law in favour of the appellant, we remit the matter to the CESTAT for fresh consideration as to whether the extended period of limitation had been correctly invoked by the department or not and we do not express any opinion on the finding on merits. Accordingly, for the purpose of remittal, we set aside the order of the CESTAT and the civil miscellaneous appeal is allowed. Consequently, M.P.No.1 of 2011 is closed. No costs. Sd/ Assistant Registrar /True Copy/ Sub Assistant Registrar ss To 1. The Customs, Excise and Service Tax Appellate Tribunal South Zonal Bench Haddows Road Chennai 600 006 https://hcservices.ecourts.gov.in/hcservices/ 2. The Commissioner of Central Excise Chennai II Commissionerate MHU Complex, Nandanam Chennai 600 035 3. The Commissioner of Central Excise(Appeals) Chennai-34 4. The Joint Commissioner, Chennai-II, Commissionerate, MHU Complex, Nandanam, Chennai- 600 035 +1 CC to Mr.Arun Kurian Joseph, Advocate, Sr.No.76631 +1 CC to Mr.P.Mahadevan, Sr.Counsel for Central Govt., Sr.No.77013 C.M.A.No.110 of 2010 NG(CO) MS:19/01/2012 https://hcservices.ecourts.gov.in/hcservices/