2006 (5) TMI 325 - AT - Central Excise

Summary

Issues:
Challenge to reduction of duty demand based on exemption withdrawal for cotton yarn manufacturing from cotton waste.

Analysis:
The case involved a challenge by the Revenue against an order reducing the duty demand from Rs. 1,75,616/- to Rs. 69,246.37. The dispute arose from the exemption withdrawal for cotton yarn manufacturing from cotton waste effective from 1-3-94. Prior to this date, the yarn was exempt from Central Excise duty. Post 1-3-94, only yarn in hank form was exempt while yarn on cones attracted duty. The Revenue contended that the respondents, engaged in cotton yarn production, were clearing yarn on cones, hence liable for duty. The adjudicating authority confirmed the demand based on figures provided by the respondent. However, in the appeal before the Commissioner (Appeals), the respondent revised the figures claiming some yarn was cleared in hank form, thus duty-free. The Commissioner (Appeals) accepted this without substantial evidence, leading to the duty reduction decision.

The adjudicating authority's confirmation of demand was based on the respondent's figures for yarn cleared on cones. The authority calculated the duty amount due and noted the respondent's agreement with the figures. A partial payment had been made, leaving a balance payable. Subsequently, the respondent submitted a revised chart and affidavit to the Commissioner (Appeals), claiming less yarn was actually cleared on cones. Despite lack of concrete evidence, the Commissioner (Appeals) accepted this claim and reduced the duty demand. The Appellate Tribunal found merit in the Revenue's appeal, highlighting that the reduction lacked evidential support. Consequently, the Tribunal set aside the order reducing the demand and reinstated the original duty amount. The appeal was allowed in favor of the Revenue.

In conclusion, the judgment centered on the dispute regarding duty liability for cotton yarn cleared on cones post-exemption withdrawal. The Tribunal emphasized the importance of concrete evidence in revising duty calculations, overturning the duty reduction decision made without sufficient proof. This case underscores the significance of accurate documentation and evidence in tax-related matters to ensure fair and just outcomes.