V.V. Raghavachari, Member (J)

1.The appellants, M/s. Mermaid Marine Products (P) Ltd. admittedly manufacture fish meal and fish oil in their factory. Under Notice dated 11-5-1083 they were called Upon to show cause why action should not be taken against them for carrying on the said activity of manufacture of fish oil without taking out a Central Excise licence therefore and without observing due formalities in connection therewith. They replied contending that fish meal as well as fish oil were exempted and that though they had applied for licence the same had been returned with audit and that they had not, therefore, committed any contravention. They further claimed that the demand was time-barred.

2. Under order dated 8-6-1984 the Additional Collector of Central Excise, Cochin held the charges established and imposed penalties [Rs. 1,000/- under Rule 9(2), Rs. 500/- under Rule 52A, Rs. 1,000/- under Rule 222 and Rs. 5,000/- under Rule 173Q of the Central Excise Rules] and also demanded payment of duty on the clearances amounting to Rs. 8,43,376.05 during the period April, 1977 to November, 1982. It is against the said order that the present appeal has been filed.

3. We have heard Shri C. Chidambaram, Consultant, for the appellants and Shri K.D. Tayal, Senior Departmental Representative, for the respondent.

4. Shri Chidambaram contended that under Notification No. 115/75-CE, dated 30-4-1975 the fish oil manufactured by the appellants was exempted from payment of duty and, therefore, the order of the Additional Collector was not correct. He further contended that in any event the appellants had been informing the Excise authorities of their intended activities ever since they started the factory and there had been no suppression of facts at any time and, therefore, the demand was in any event invalid except for the normal period of six months preceding the Show Cause Notice. Shri Tayal, on the other hand, contended that the claim for benefit under Notification No. 115/75-CE was not open to the appellants and that the demand was valid for a period of 5 years under the proviso to Section 11A of the Central Excises and Salt Act, as held in the order under appeal.

5. We have carefully considered the submissions of both sides. Shri Chidambaram points out that fish oil is also oil and relies upon the definition of 'oils' in the Encyclopaedia Britannica (Vol. 13); Webster's Third New International Dictionary and Chambers Dictionary of Science and Technology. We find that the Additional Collector also had proceeded on the basis that fish oil is an oil, though in connection with the applicability of the exemption under Notification No. 115/75-CE the Additional Collector had held against the appellants, based on the words in the notification.

6. Notification No. 115/75 wholly exempts from excise duty goods falling under Item 68 of the First Schedule to the Central Excises and Salt Act and manufactured in the factories covered by any of the industries specified in the Schedule to the Notification. Item No. 4 of the Schedule to the Notification reads : "Oil Mill and Solvent Extraction Industry". Shri Chidambaram contends that the extraction of fish oil would fall under the words "Oil Mill Industry". But the Additional Collector had rejected this contention. He had held as follows in this connection :

"This entry covers only the usual oil mills which crush and extract oil from oil seeds and also the solvent extraction connected with it. Their contention that fish oil is also covered by this is not correct. Fish oil is extracted by a process of steam cooking of fish and such factories are not referred to as oil mills. The Produce Cess Act, 1966 which collects cess from oil mills covers only Cotton Mills and Oil Mills which extract oil from oil seeds. The fact that they are not eligible for exemption under any other Notification as stated in the show cause notice has been conceded and hence, further examination of the same is not considered n