- (1.)In the instant case, duty is sought to be levied by the respondent by taking recourse to the extended period of limitation under Section 11A of the Central Excise Act.
(2.)The plea of the appellant is that it was established as a reserach organisation and had even been importing goods from abroad and getting exemption from payment of customs duty on the basis that it was a research organisation. In reply to the show cause notice in paragraph 2.3 it has been specifically stated that the appellant was under a bona fide belief that the goods emerged during the research and experiments were fully exempt from payment of duty and therefore, no further compliance with the provisions of Excise Law was called for. Mr. Lakshmikumaran submits that in view of this explanation, the provisions of Section 11A proviso were not applicable and he further submits that in actual fact the products supplied by the appellant emerged out of their research activity and no excise duty was payable.
(3.)We are unable to agree with the learned Counsel that what was supplied by the appellant would come within the meaning of the expression "that the goods are produced during the carrying out of experiments or research". It is quite obvious that the appellant had a technical expertise to manufacture sophisticated equipment on the orders placed on it even though the appellant is a Research and Development Organisation. As a result of its research it had acquired sufficient acumen to be able to manufacture the equipment tailor-made for the use of the purchaser. The equipment so manufactured in supply cannot be regarded as being a product of research.