TMI Blog2010 (1) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... ainable. - 6-7 of 2005 - - - Dated:- 27-1-2010 - Ashutosh Mohunta and Mehinder Singh Sullar, JJ. Shri Sanjiv Kaushik, Sr. Standing Counsel, for the Appellant. Shri M.P. Devnath, Advocate, for the Respondent. [Order per : Ashutosh Mohunta, J.]. - This judgement shall dispose of CEA No. 6 of 2005 and CEA No. 7 of 2005, as common questions of law and facts arise in both these appeals. However, the facts are being extracted from CEA No. 6 of 2006. 2. The revenue has filed the present appeal under Section 35G of the Central Excise Act, 1944 (for short hereinafter referred to as 'the Act') against the order dated 6-7-2004 [2004 (172) E.L.T. 357 (Tri.-Del.)] of the Customs, Excise and Service Tax Appellate Tribunal (for short CESTAT) on the ground that the following questions of law arise for our consideration :- (i) Whether a manufacturer who claimed to have sent Acrylic Fibre (inputs) to job workers for manufacture of Acrylic Yarn and department proved that the said job workers were non existing and fictitious, is liable to pay Central Excise duty as it is evident that the said manufacturer had himself manufactured the said goods and cleared the same without pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various stages of manufacture are involved. First of all, acrylic fibre is to be converted into yarn through the process of spinning. Spun yarn is then dyed; Dyed yarn is processed into fabrics. The fabric is converted into knitted garments and knitted garments after necessary final inspection are packed and exported. 7. All the above said facilities are normally not available with the small/medium level manufacturer exporter. He has to invariably depend upon job workers/processors. In this kind of trade/industry, the goods are got processed through the brokers. These brokers receive the raw material, get it processed into yarn or fabrics as the case may be and charge their commission on the goods so processed. The entire processing activity etc., outside the factory is done through brokers. These brokers seldom disclose the identity of processors and some times even provide the incorrect name and address of the job workers, in order to maintain secrecy of the business. But under the ground realities and situations of this kind of industry, a manufacturer-exporter has no option but to depend upon such brokers for his survival. 8. In the present case also, the Respondents suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the fibres have been claimed to have been sent are fictitious and non existent and cleared the goods without payment of duty. That apart, it was argued that the Respondents had not followed the procedure set out Notification No. 47/94-C.E. dated 22-9-1994. 14. On the other hand, the Respondents had argued that no substantial question of law arises for the consideration of this Hon'ble Court. All the questions raised in the present appeal are questions of facts. It was submitted by the Respondents that the CESTAT is the last fact finding authority and the CESTAT has arrived at the correct conclusion after going through detailed facts involved in the present case. The duty demand in the present case depends on ascertainment of the fact whether the final products have been exported or not. The CESTAT has applied its mind and after proper appreciation of facts and evidence on record has held that no duty can be demanded on the raw material used in the manufacture of the final product as the final product has ultimately been exported. The CESTAT records that the Revenue has not led in any evidence to show that the yarn was manufactured by the Respondents themselves in their factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s supposed to have been sent to by the Appellants for conversion into yarn were found to be fictitious and thus they have themselves manufactured the yarn and removed the same for home consumption clandestinely without payment of Central Excise duty leviable thereon. The investigation conducted by the Revenue, it appears from the records, remained confined to the stage of non-existence of the job workers only. Once the Revenue found that the job workers are fictitious, the charge has been levelled against them and confirmed in the impugned Order that they had themselves converted fibre into yarn and cleared it without payment of duty. No material/evidence has been brought on record to even indicate as to whether any investigation was carried out as to whom the said yarn had been sold and how the same was removed from the factory of the Appellants. The yarn in question is 4,43,954 kgs. of acrylic yarn, 18,060 kgs, of acrylic waste and 15,170 kgs. of Moha yarn. Some material should have been brought on record to show the sale of the said yarn to some persons. In absence of any such material the entire case of the Revenue is based on assumptions and presumptions that is, as the job wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant. In the absence of any such material, the findings of the adjudicating authority and the Commissioner (Appeals) that the entire yarn has been cleared clandestinely without payment of duty cannot be sustained. Not even a single document has been produced in order to establish that the yarn after manufacture was cleared without payment of duty in the home market. A perusal of the export documents clearly shows that the yarn after manufacture was used in knitted garments which were subsequently exported by the respondent in order to discharge their export obligations under the advanced licence scheme. The Hon'ble Apex Court in Oudh Sugar Mills's case (supra) had clearly held that duty cannot be confirmed on the basis of mere suspicion, howsoever strong it may be. 19. Furthermore, the assessee has brought on record ample evidence in the shape of copies of shipping bills, invoice, Bank Realization Certificate, DECC Books of export and redemption letters issued by the licencing authority which clearly shows that they have exported the garments in fulfilment of their export obligation. In this regard, export Obligation Discharge Certificate issued by the office of Joint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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