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2013 (7) TMI 795 - SUPREME COURTManufacturing of Yarn - counts - rate of duty - State of things which has been shown to be in existence within a period shorter than that within which such things or states of things usually cease to exist is still in existence – Respondent company is engaged in the business of manufacturing of various counts of cotton yarn falling under heading 52.03 of the Central Excise Tariff Act, 1985 at the relevant point of time. It appears that at the relevant point of time the rate of tax on the yarn manufactured depended on the count/finesse of the yarn. Higher the count higher the duty - Officers of the Central Excise Department inspected the factory premises of the respondent company and recovered two registers and a file - Perusal of the two registers and the files revealed that the assessee was manufacturing higher counts over and above the tolerance limit in respect of the following counts declared to the department and cleared the same without payment of appropriate duty on the higher counts - Held that:- The judgment in the case of Ramalinga Choodambikai Mills Ltd [1974 (9) TMI 54 - HIGH COURT OF MADRAS], appears to be a sound view in law and obviously based on the principle enunciated under Section 114 of the Evidence Act, wherein it was held that If the department on inspection of a manufacturing premises on a particular day detects that goods of a particular specification are being manufactured, the department is entitled in law to presume that (until the manufacturer proves the contra) goods of the same specification are continued to be manufactured. In the instant case the content of the recovered FILE and the statements of the employees of the respondent must be examined to ascertain the fact whether the respondent manufactured during the period covered by the FILE - yarn of a higher count than the declared count. There is no any clear finding on record from any one of the authorities below that the materials gathered by the department would establish that basic fact – Decided against the Revenue.
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