Per V.K. Agrawal : M/s. Afcons Pauling Joint Venture have filed this appeal against Order-in-Original No. 18/2003 dated 1.4.2003 passed by the Commissioner, Central Excise on remand by the Tribunal, vide Final Order No. 1049/99-D dated 16.12.1999 [reported in 2000 (36) RLT 854 (CEGAT)].

2. Sh. L.P. Dhir, learned Advocate, mentioned that the appellants, a construction firm, were entrusted by the Punjab Government with the construction of roads and bridges for four laning of National High Way No. 1 from Khanna to Jalandhar carried out during the period March, 1989 to February, 1994; that a show cause notice dated 31.3.94 was issued to them for (i) demanding Central Excise duty on the Websols and crushed stones manufactured by them, (ii) confiscating websols and crushed stones and (iii) imposing penalty under Rule 9 (2), 173Q and 226 of the Central Excise Rules, 1944; that the Collector, Central Excise, under Order-in-Original No. 85/CE/94 dated 25.10.1994 confiscated the seized goods, confirmed the demand of duty in respect of websols and crushed stones and imposed personal penalty of Rs. 20 lakh; that the Appellate Tribunal, vide Final Order No. 1049/99-D dated 16.12.1999 remanded the case as the (a) Collector had failed to discuss the fact about Superintendent, Central Excise having enquired from them in April, 1992 about the details of activities of manufacture of websols and crushed stone before justifying the invocation of the extended period of limitation; and (b) he did not examine the applicability of Notification No. 59/90-CE dated 20.3.90; that the Commissioner now, under the impugned order, has-

(i) vacated the seizure of websols,

(ii) dropped the demand of duty in respect of websols,

(iii) confiscated the crushed stone and imposed a redemption fine of Rs. 5 lakh,

(iv) confirmed the demand of duty in respect of crushed stones, and

(v) imposed a penalty of Rs. 15 lakh.

3. The learned Advocate submitted that the extended period of limitation is not invokable as there is no allegation, not even a whisper, in the show cause notice that there is suppression of facts with an intent to evade payment of duty; that it has been held by the Supreme Court in Associated Cement Co. Ltd. Vs. C.C. 2001 (42) RLT 937 (SC)=(2001) 4 SCC 593 that the words "intent to evade payment of duty" were of utmost relevance and that intent to evade duty was essential before Proviso could be invoked; that the appellants bonafidely believed that the activity of making stone aggregate for home consumption was not dutiable being related to construction of immovable properties; that it has been held by the Supreme Court in Jaiprakash Industries Ltd. Vs. C.C.E., Chandigarh, 2002 (53) RLT 501 (SC)=2002 (146) E.L.T. 481 (SC) that "mere failure or negligence on the part of the manufacturer in not taking out a licence and in not paying duty does not attract the extended period of limitation. This court has held that there must be evidence to show that the manufacturer knew that the goods were liable to duty and that he was required to take out a licence... This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful mis-statement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation." He, further, submitted that the Supreme Court in Jaiprakash Industries Ltd. case, in similar situation, has held that in view of the divergent views of the various High Courts on the question whether crushing of bigger stones or boulders into smaller pieces amounts to manufacture or not, there was bonafide doubt at that point. The learned Advocate also mentioned that the Commissioner's finding that the letter dated 11.4.91 of the Superintendent was only in respect of websols and not in respect of crushed stones and so extended period of limitation is invokable is not correct in view of the