COMMISSIONER OF CENTRAL EXCISE, AHMEDABADversusM/S. GUJARAT AMBUJA EXPORTS LIMITED

                               [2016] 4 S.C.R. 38


A       COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD
                                        v.
               MIS. GUJARAT AMBUJA EXPORTS LIMITED
                         (Civil Appeal No. 3302 of2008)
B                              AUGUST 08, 2016
                   [A.K. SIKRI AND N.V. RAMANA, JJ.]
            Customs Act. 1962 -· s. 28, 28A B, 112111 ./A - Notification No.
     2112002-Cus dated 01. 03.2002 rlw. Notification No. 661200./-Cus
     dated 09.07.200./ - Notification allowed import of crude oil (non-
c    edible) on payment of concessional rate of customs duty i.e. @ 20%
     on~y when the same is used in the mamifacture of soaps or industrial
     fatty acids - Respondent-assessee manufactured refined edible oil
     (75%) out of the said imported crude oil - During the course of
     refining, Palm Fatty Acid emerged as by-product- Claim for benefit
D    under notification treating the said by-product to be industrial Fatty
     Acid - Held: Jn order to ascertain ll'hether the asses.see can avail
     benefit of exemption from tax/duty under a particular notification.
     the assessee must satisfy the stipulations and conditions mentioned
     in the said notification under which the benefit is claimed - Thus,
     11'hen the main mamifacturing activity of the Responde/11-assessee
E
     relates to c Ii hie product like refined oil (75%) and ij' in that process
     25% of fatly (palm) emerges as a by- product, the requireme/lf of
     exemption notification not satisfied - Customs (import of goods at
     concessional rate of duty for 111a111ifacture of excisable goods) Rules,
     1996 - Rule 8 - foxation.
f
            Exemption Notification - Purpose of HSN Explanatory Notes
     - Held: In cases where exemption notification are to be construed,
     HSN Notes only serve as guide and not used to interpret the
     notification.
           Allowing the appeal, the Court
G
           HELD: 1. The present case relates to the admissibility of
     exemption notification. When the question arises as to whether
     exemption from tax/duty of a particular notification is available to
     assessee or not, the same has to be examined in terms of the
     said notification i.e. whether the stipulations and conditions
II
                                        38
     COMMNR. OF CENTRAL EXCISE, AHMEDABAD v.                               39
        M/S. GUJARAT AMBUJA EXPORTS LTD.

mentioned in the said notification are fulfilled by an assessee to         A
claim the benefit of the notification. Notification No. 2112002 dated
01.03.2002, as amended by Notification No. 66/2004 dated
09.07.2004 is a general exemption notification which enlist number
of products that are given full or partial exemption from payment
of custom duty or additional duty. [Para 17] [47-A-C]
                                                                           B
      2. In order to qualify for exemption, the goods should meet
the following criterias, inter alia (i) should be non-edible (ii) should
have Free Fatty Acid 20%. (iii) should be used for the manufacture
of soaps, industrial fatty acids and fatty alcohol. [Para 18] [47-F-
G]
                                                                           c
       3. In the instant case, crude palm oil which was imported
was used for making edible products like refined oiJNanaspati.
In the process of said manufacture, 25% nf fatty (palm) was
produced and 75% was oil which was edible. Thus,,when the main
manufacturing activity related to edible product which is 75%, if
in the process 25% of fatty (palm) emerged. as a by-product it             D
cannot be said that first requirement of exemption notification is
satisfied. Even if Industrial Fatty Acid is to be treated as separate
manufacturing activity and it is non-edible, the same is only to
the extent of 25%. That would not satisfy the requirement of the
exemption notification in question. [Para 19] [48-B-C]                     E
       4. In case where exemption notification was to be construed,
HSN Explanatory Notes only s-erve as guide and not used to
interpret the same, as rightly reasoned by the Commissioner.
The HSN in question categorically stipulates that Fatty Acid
Distillate is characterized by high free fatty acif.I which cannot be       F·
25%. So the by-product is rightly discarded by the Commissioner
as not coming within the nomenclature of PFAD. [Paras 20 and
21) [48-D, F]
      State of Punjab v. Bhatinda District Co-op Milk P. Union
      Ltd. 2007 (217) ELT 325 (SC) - referred to.                          G
                        Case Law Reference
       2007 (217) ELT 325 (SC)            referred to     Para 22
    CIVIL APPELLATE JURISDICTlON: Civil Appeal No. 3302 of
2008.
                                                                            H
40              SUPREME COURT REPORTS                        [2016] 4 S.C.R.



A          From the Order No. A/2587/WZB/AHD/07 dated 12.10.2007 of
     the CESTAT, West Zonal Bench, Mumbai in Appeal No. C/65/2007.
           K. Radhakrishna, Sr. Adv., Rupesh Kumar, Ritesh Kumar, Anirudh
     P. Mayee, B. Krishna Prasad, Advs. for the Appellant.
          V. Lakshmikumaran. Ms. Jyoti Pal, Ms. L. Charnaya, S.
B    Vasudevan, M. P. Devanath, Advs. for the Respondent.
           The Judgment of the Collli was delivered by
            A. K. SIKRI, J. I. The issue involved in the present appeal is
     whether the respondent/assessee is entitled to avail the benefit of
c    Notification No. 21/2002-Cus dated 01.03 .2002 read with Notification
     No. 66/2004-Cus dated 09.07.2004 for import of crude palm oil (non-
     edible grade) which is not used in the manufacture of Industrial Fatty
     Acid whereas the assessee is using the same for manufacturing the
     refined edible oil.
           2. This issue has arisen in the following factual background:
D
            The assessee is the manufacturer ofrefined edible oil, Vanaspati,
     cotton yarn, starch, cattle feed, wheat floor etc. It is registered with
     Kadi Division of the Central Excise. From Apri I, 2002, the assessee
     engaged itself in refining of various edible oils. During the course of
     refining, it used to get Palm Fatty Acid Distillate as a by-product which
E
     was classified under Chapter Heading No. 38231900 and cleared it duty
     free claiming the benefit of Notification No. ! 175/75-CE dated
     30.04.1975. During the period September, 2003 to January, 2004. the
     assessee imported 1990.031 metric tons of crude palm oil. At that time
     crude palm oil having Free Fatty Acid (FFA) 20 percent, or more was
F    eligible for concessional rate of duty under Notification No. 21/2002-
     Cus dated 01.03.2002. No condition was attached to avail that exemption.
            3. We are not concerned with this import in the present appeal.
     Thereafter on 16.01.2004, Notification No. 21 /2002-Cus dated 0 I .03 .2002
     was amended by Notification No. 20/2004-Cus dated 16.01.2004 wherein
G    the words "for the manufacture of soap" were inserted in the original
     notification.
           4. The assessee imported 8435.816 metric tons of crude palm oil
     (industrial grade) valued at Rs.17, 15,88.508/- and cleared the same on
     payment of customs duty of Rs. 3,47.95.453/- (@20% basic + 2%
H    education cess) under Notification No. 21 /2002-Cus dated 01.03.2002
     COMMNR. OF CENTRAL EXCISE, AHMEDABAD v.                                      41
    M/S. GUJARAT AMBUJA EXPORTS LTD.[A. K. S!KRI, J.]

read with Notification No. 66/2004-Cus dated 09.07.2004 during the                A
period 12.09.2004 to 12.08.2005. As per the said notification, crude oil
(non-edible oil) could be imported by paying customs duty@20% only
when the said crude oil is to be used in the manufacture of soap or
Industrial Fatty Acid. The assessee in the present case have been
manufacturing refined edible oil out of the said crude oil. The assessee
                                                                                  B
did not have facilities for sapon ification and fat splitting in their factory.
 rhe manufacturing process is one of distillation. As a result of this
process, a product called "Palm Fatty Acid Distillate" emerges. The
assessee after the processing of the imported 8435.816 metric tons of
crude oil (non-edible grade) has manufactured 2219.895 metric tons of
palm fatty acid distillate (industrial grade) i.e. approximately 25% and          c
approximately 70% as refined palm oil.
       5. Having regard to the aforesaid facts, the appellant/Revenue
was of the view that the assessee was not entitled to the benefit of
Notification No. 21 /2002 read with Notification No. 66/2004. The
Department, thus, issued show cause notice to the assessee demanding              D
custom duty in the sum of Rs. 7,89,89,868/- under para 8 of Customs
(Import of goods at concessional rate of duty for manufacture of
excisable goods) Rules, 1996 (hereinafter referred to as the 'Rules') as
well as interest under Section 28AB of the Customs Act, 1962
(hereinafter referred to as the 'Act'). In the show cause notice the
Department also proposed imposition of penalty under Section l \ 2/l I4A           E
of the Act.
      6. The case set up by the Department in the said show cause
notice was two fold, i.e.
       (i) the Palm Fatty Acid Distillate (PFAD) manufactured by the               F
           assessee was not Industrial Fatty Acid; and
       (ii) even if Palm Fatty Acid was to be taken as Industrial Fatty
            Acid, the benefit of the aforesaid two t10tifications was not
            available to such a product as the assessee is using the same
            for the manufacture ofrefined edible oil and Vanaspati.               0
      7. In order to support the contention that PFAD was not Industrial
Fatty Acid, the Department relied upon the following material:
       (i) The Department has relied upon the test report of the Chemical
       Examiner, Yisakhapatnam Dr. T.A. Sreenivasa Rao, which is
       reproduced below·                                                           H
42       SUPREME COURT REPORTS                         [2016] 4 S.C.R.



A           '·Repo1t: The sample is in the form of pale yellow soft solid
     mass. It is a by product of physical refining of palm oil. It is Palm
     Fatty Acid Distillate."
            For arriving at the aforesaid opinion, Dr. Rao had given
     detailed technical report, relying, i11fer alia, upon the available
B    literature and the test conducted on the said product.
     (ii) A sample was also sent to Shri Narendra Kumar, Chemical
     Examiner, Customs House Laboratory, Kand la who has given his
     test report as under:
            "The sample is in the form of pale cream soft mass. It has
c    the characteristics of palm fatty acid having FFA (as palmitic acid)
     = 87.1 % by wt & Acid value 190.87"

     (iii) The Department also collected the evidence in the form of
     statements from various customers of the assessee including Ml
     s Godrej Industries Ltd. and Mis Aquagel Chemicals Pvt. Ltd.
D    These customers had deposed that the PFAD ,bought by them
     from Mis GAEL had to undergo extensive further processing
     before it was converted into fatty acid. Shri Murali S. Mukerjee,
     DGM, Mis Godrej Industries Ltd. deposed that Industrial Fatty
     Acids were used in soaps and industrial surfactants, personal care
E    and cosmetics, rubber and tyres, plastic, coating and links, textiles
     auxiliaries, fabric care and lubricants and greases etc. On being
     asked about the process involved in converting Palm Fatty Acid
     Distillate (PFAD) to stearic acid, he stated that firstly the Palm
     Fatty Acid Distillate (PFAD) was fed to oil pre-treatment plant
     for improvement on clarity and for removal of sediments and
F    particles if any; the treated PFAD was then fed to fat splitting
     plant; in fat splitting plant, unconverted glycerides present in PFAD
     were converted into free fatty acids (crude fatty acid) and glycerine
     at a designed pressure; in the second step, crude fatty acid was
     hydrogenated with hydrogen in presence of nickel catalyst; in
G    hydrogenation reaction all the double and triple bonds were
     converted into single bond; the hydrogen required for hydrogenation
     reaction 'was produced by steam reforming of natural gas; after
     hydrogenation reaction catalyst was removed by filtration in leaft
     type filter and colour was improved by bleaching with the activated
     carbon and diatomite earth in a bleacher, finally filtered and
H    bleached hard fatty acid was homogenized and flaked as tin-distilled
 '
    COMMNR. OF CENTRAL EXCISE, AHMEDABAD v.                                     43
   M/S. GUJARAT AMBUJA EXPORTS LTD.[A. K. SIKRI, .I.]

      stearic acid; in case of distilled stearic acid, hydrogenated fatty       A
      acid was distilled in distillation plant and distillate produced was
      homogenized and flaked as distilled stearic acid; PFAD could be
      used for the manufacturing of different types of fatty acid (stearic
      acid and fatty alcohol); PFAD could also be used for the
      manufacture of soaps.
                                                                                8
             To the same effect was the statement of Shri Mallikarjun
      G. Rane, Production Manager of Mis Aquagel Chemicals Pvt.
      Ltd.
        8. The assessee submitted its reply/defence, refuting the averments
made in the show cause notice. It relied upon the following HSN                 C
Explanatory Notes to argue that the product was in fact Industrial Fatty
Acid ..
    "28.23- INDUSTRIALMONOCARBOXYLIC FATTY ACIDS;
ACID 0 FROM REFINING; INDUSTRIAL FATTY ALCOHOLS.
       Industrial monocarboxylic fatty acids; acid oils from refining ...       D
3 823 .19-0ther.... "
      It was also submitted that there was no allegation in the show
cause notice that the product PFAD is not covered by heading 28.23 of
the HSN which lists Industrial Fatty Acids and, therefore, PFAD had to
be considered as Industrial Fatty Acids.                                        E
       9. The Adjudicating Authority considered the aforesaid respective
contentions of the Revenue as well as the assessee. He, however,
brushed aside the contention of the assessee based on HSN Explanatory
Notes with the observations that though it was a settled principle that in
the matter of tariff classification, HSN is a reliable guide and is generally    F
to be followed but when it comes to the application of a notification,. the
HSN is to be consulted only for guides. In the opinion of the Adjudicating
Authority, since the assessee was claiming the benefit of exemption
notification it was to be examined as to whether assessee was covered
by the said Notification No. 20/2002. According to him, in order to
                                                                                 G
ascertain the meaning of the term "Industrial Fatty Acid", the proper
test was trade parlance and the normal meaning which a knowledgeable
person would attach to the term and not necessarily what is laid down in
the HSN. Thereafter, theAdjudicatingAuthority discussed the statements
of the representatives of the two customers as mentioned above, on the
basis of which it was concluded that in technical and trade parlance, it        H
44              SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A    cannot be said that PFAD is the same as Palm Fatty Acid and, therefore,
     it could not be called as an Industrial Fatty Acid. The Adjudicating
     Authority further held that this was supported even by HSN Explanatory
     Notes 28.23 wherein it states that "Industrial monocarboxylic fatty acids
     are generally manufactured by the saponification or hydrolysis of natural
     fats or oils".
8
             I 0. Thereafter, the Adjudicating Authority discussed the second
     aspect raised in the show cause notice on the premise and presumption
     that PFAD is Industrial Fatty Acid. On facts, it was held that crude
     palm oil Imported by the assessee was not used for the manufacture of
     Industrial Fatty Acid, as the admitted fact was that as a result of the
c    manufacturing process of the assessee, approximately 75% of the product
     is refined edible oil and only 25% is PFAD (by quantity). View taken by
     the Adjudicating Authority was that when the notification lays down the
     condition that the crude palm oil must be used by Industrial Fatty Acid, it
     means that its use must be substantive and not nominal. Jn other words,
D    at least the crude palm oil should be primarily used forthe manufacture
     of Industrial Fatty Acid, which was admittedly not the case.
            11. In nutshell, on the aforesaid basis, Adjudicating Authority
     confirmed the demand raised in the show cause notice by holding that
     the assessee did not fulfill the conditions contained in the exemption
E    notification.
             12. The assessee preferred an appeal against the order of the
     Adjudicating Authority. Said appeal has been decided by the Custom
     Excise and Service Tax Appellate Tribunal (hereinafter referred to as
     the 'Tribunal') vide impugned judgment. A reading of the judgment of
F    the Tribunal would reflect that it has gone by the HSN Explanatory
     Notes which stipulates that Industrial monocarboxylic fatty acids are
     'generally' manufactured by the saponification or hydrolysis ofnatural
     fats or oils. Picking up the word 'generally' from the said language in
     HSN, the Tribunal came to the conclusion that process of sapon ification
     or hydrolysis of natural fats or oils may be a process generally employed
G    but that was not the 'only' process to obtain Industrial Fatty Acid as the
     expression 'generally' cannot be equated with 'only' or 'specifically' or
     'exclusively'. The Tribunal held that as per HSN Explanatory Notes,
     the fatty acids distillate are also covered by the said chapter and, therefore,
     benefit of the notification was available to the assessee.
H           Insofar as second issue raised by the Revenue in the show cause
      COMMNR. OF CENTRAL EXCISE, AHMEDABAD v.                                  45
   MIS. GUJARAT AMBUJA EXPORTS LTD.[A. K. SlKRI, J.]

notice is concerned, the Tribunal again differed with the order of the         A
Commissioner/Adjudicating Authority on the ground that when the
notification stipulates that impo1ted crude palm oil must be used for
Industrial Fatty Acid it does not mean that yield oflndustrial Fatty Acid
should be to the extent of 100% and even when it was to the extent of
25% that would suffice as the notification nowhere mentions any
                                                                               8
percentage yield oflndustrial Fatty Acid.
      On the basis of the aforesaid reasoning, the Tribunal has allowed
the appeal of the assessee and set aside the order passed by the
Commissioner.
        13. Feeling aggrieved by that order, present appeal is filed by the    c
Department. Mr. K. Radhakrishna, learned senior counsel appearing
for the Department, heavily relied upon reasoning adopted by the
Commissioner on the basis of which it was held that assessee was not
entitled to the benefit of exemption. Neat submission made by Mr.
Radhakrishna was that there was a patent error committed by the Tribunal
in relying upon HSN Explanatory Notes, little realising that the matter        D
did not pertain to classification but exemption of a notification and in
order to qualify for exemption from payment of the import duty under
the said notification, the focus of the Tribunal should have been as to
whether the assessee has fulfilled the conditions of the said notification.
He submitted that exemption notifications were to be construed very            E
strictly and in the instant case, the assessee has failed to fulfill the
conditions laid down in the notifications.
        14. Mr. Lakshmikumaran, learned counsel appearing for the
respondent/assessee, on the other hand, submitted thatthe reliance placed
by the Tribunal on HSN Explanatory Notes was perfectly justified and           F
stressed upon the reasoning that was adopted by the Tribunal in this
behalf. His further submission was that there are various methods/
processes that may be used to produce Industrial Fatty Acids like
hydrolysis, saponification, vacuum distillation, splitting, etc. Any of such
processes may be used by an importer intending to avail the benefit
under Sr. No. 30 ofNotification No. 21/2002-Cus. The description for           G
Sr. No. 30 during the relevant period did not specify any specific process
to be followed by the importers, which implies that the importers were
free to choose any of the different processes available. In this regard,
amendment made to Notification No. 21 /2002-Cus .vide Notification No.
 11 /2006-Cus dated 01.03 .2006 is important. For the first time, an entry     H
46                SUPREME COURT REPORTS                      [2016] 4 S.C.R.


·A   (S. No. 30(A)) was introduced which also mentioned that the importer
     must have the facility for splitting of oils. He argued that it was, in a
     sense, built-in condition of the process (splitting of oil) that must be
     employed to obtain fatty acids. However, even then clause B of S. No.
     30 of the Notification continued to exist as such. In other words, after
     the amendment, the requirement of splitting of oils, does not exist in
B
     Clause B, which is identical to Clause A prior to amendment covering
     the respondents. According to him, the 2006 amendment makes it clear
     that prior to such amendment clause (a) of Sr. No. 30 covered all the
     process that are possible for manufacture of Industrial Fatty Acids.
              On the second issue, Mr. Lakshmikumaran again maintained
 c   the stand of the assessee which was taken before the Authorities below,
     namely, it is not possible to obtain 100% PFAD by distilling the crude
     palm oil (non-edible grade) and, therefore, due to technological necessity,
     the assessee could not be denied the benefit of exemption. It was also
     submitted that merely because the proportion of PFAD is 25%, would
D    not mean that PFAD is a by-product. He submitted that the assessee
     was engaged in manufacture of PFAD and refined palm oil. PFAD is
     sold to soap manufacturers and refined palm oil is used to manufacture
     Vanaspati.
            15. In addition, the learned counsel also submitted that in any case
 E   the entire demand is time barred inasmuch as Rule 8 provides for recovery
     of duty in cases where the goods imported are not used for intended
     purpose. He accepted that Rule 8 does not mention any specific time
     within which a show cause notice must be issued. Ho,wever, his
     submission was that this Court in the case of State ofPunjab v. Blwtinda
     District Co-op Milk P. Union Ltd. 1 has held that where no period of
 F   limitation has been prescribed, statutory authority must exercise its
     jurisdiction within a reasonable period. Referring to Section 28 of the
     Act, he submitted that since that Section prescribes 6 months for cases
     where there is no collusion or willful mis-statement or suppression of
     facts, period of 6 months should be treated as reasonable period of
 G   limitation. On that basis, the show cause notice which was issued on
     24.03.2006 for the period 12.09 .2004 to 12.08.2005 was time barred,
     submitted the learned counsel.
           16. We have considered the respective submissions of learned
     counsel for the parties.
 H   I   2007 (217) ELT 325 (SC)
     COMMNR. OF CENTRAL EXCISE, AHMEDABAD v.                                      47
    MIS. GUJARAT AMBUJA EXPORTS LTD.[A. K. SIKRI, J.)

        17. At the outset, we would Iike to remark that the learned senior        A
counsel appearing for the Revenue is right in his submission that present
case is not a case for classification of goods but relates to the admissibility
of exemption notification. When the question arises as to whether
exemption from tax/duty ofa particularnotification is available to assessee
or not, the same has to be examined in terms of the said notification i.e.
                                                                                  B
whether the stipulations and conditions mentioned in the said notification
are fulfilled by an assessee to claim the benefit of the notification.
Notification No. 21/2002 dated 01.03.2002, as amended by Notification
No. 66/2004 dated 09.07.2004 is a general exemption notification which
enlist number of products that are given full or partial exemption from
payment of custom duty or additional duty. At Sr. No. 29 of this                  c
notification are edible oils falling under certain headings of Chapter 15.
In contrast, goods mentioned at Sr. No. 30 (with which we are concerned)
talks of non-edible goods having a Free Fatty Acid. The precise
description of the goods which qualify for exemption from payment of
custom duty is as under:
                                                                                  D
       "(A) [All goods], other than edible grade, having Free Fatty Acid
       (FFA) 20 per cent or more and falling under heading 1507, 1508,
       1509, 1510, 1511, 1512, J 513, 1514 or 1515, for the manufacture
       of[soaps, industrial fatty acids and fatty alcohol].
       (B) [All goods), other than edible grade, having Free Fatty Acid           E
       (FFA) 20 per cent or more and falling under heading 1507, 1508,
       1509, 1510, 1511, 1512, 1513, 1514or 1515."
      18. In order to qualify for exemption, the goods should meet the
following criteria:
       (i) First requirement is that such goods should be other than edible        F
       grade which means this entry exempts non-edible goods.
       (ii) Second condition is that such goods should be having Free
       Fatty Acid 20% or more falling under chapter heading mentioned
       therein which includes 1511.
                                                                                  G
       (iii) Such goods should be used for the manufacture of soaps,
       industrial fatty acids and fatty alcohol.
       (iv) This entry further stipulates that it has to satisfy Condition
       No. 5 mentioned in Annexure to the said notification. Condition
       No. 5 reads as under:
                                                                                  H
48              SUPREME COURT REPORTS                           [2016) 4 S.C.R.



A           "5. If the importer follows the procedure set out in the Customs
            (Import of Goods at Concessional Rate of Duty for Manufacture
            of Excisable Goods) Rules, 1996."
            19. In the instant case, crude palm oil which was imported was
     used for making edible products like refined oil/Vanaspati. In the process
8    of said manufacture, 25% of fatty (palm) was produced and 75% was
     oil which was edible. Thus, when the main manufacturing activity relates
     to edible product which is 75%. If in the process 25% of fatty (palm)
     emerges as a by-product it cannot be said that first requirement of
     exemption notification is satisfied in the instant case. Even iflndustrial
     Fatty Acid is to be treated as separate manufacturing activity and it is
c    non-edible, the same is only to the extent of25%. That, according to us,
     would not satisfy the requirement of the exemption notification in question.
            20. We are in agreement with the reasoning adopted by the
     Commissioner that HSN Explanatory Notes, in case where exemption
     notification was to be construed, would only serve as guide and is not
D    used to interpret the same. Even here, we find that the HSN in question
     categorically mentio11s the product which are included by the said heading
     and specifically mentions ·fatty acid distillate' as under:
            "Fatty acid distillate, obtained from fats and oils which have been
            subjected to vacuum distillation in the presence of steam as part
E           of a refining process. Fatty acid distillate is characterised by a
            high free fatty acid (ffa) content."
            21. It, thus, categorically stipulates that Fatty Acid Distillate is
     characterised by high free fatty acid which cannot be 25%. So the by-
     product is rightly discarded by the Commissioner as not coming within
F    the nomenclature of PFAD. Contrary reasons which are given by the
     Tribunal, thus, do not appeal to this Court. In this view of the matter,
     reliance on subsequent notification of2006 is of no relevance.
            22. Insofar as contention of the assessee that the impugned
     notification is time barred, it is difficult to accept the same in the facts of
G    the present case. At the outset, we have to keep in mind Rule 8 of the
     Rules which does not prescribe any period of limitation. No doubt, in
     such an eventuality, as held by this Court in Bhatinda District Co-op
     Milk P. U11io11 Ltd. (supra), the show cause notice has to be issued
     within a reasonable period. However, for this purpose, provisions of
     Section 28 cannot be reso1ied to to state that it has to be within a period
H
      COMMNR. OF CENTRAL EXCISE. Al-IMEDABAD v.                              49
   MIS. GUJARAT AMBlJ.IA EXPORTS LTD.[A. K. SIKRL .I.]

of6 months. The question has to be decided keeping in view the facts of      A
each case and to examine whether the period in question is reasonable
or not. In the instant case, we find that it is only through intelligence
collected by ORI, Gandhidham Regional Unit that it came to be revealed
that the assessee had imported crude palm oil but it had no facility in
manufacturing soap/Industrial Fatty Acid and was using the said imported
                                                                             B
crude palm oil for making edible products like refined oil/Vanaspati. At
the time of import, the importer only gives declaration. It is the actual
use, which event takes place much after the import from where it can
be gathered as to whether the import is made for the purpose for which
it was done. As soon as the aforesaid information was gathered by
ORI, show cause notice was issued. Therefore, we are of the opinion          c
that show cause notice had been issued within a reasonable period and
it cannot be treated as time barred.
      23. For the foregoing reasons, we allow this appeal with cost
thereby setting aside the order of the Tribunal and restoring the order
passed by the Commissioner/Adjudicating Authority.                           D
Divya Pandey                                               Appeal allowed.