1995 (4) TMI 173 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty confirmation by lower appellate authority.
2. Shortage of cotton yarn not accounted for by the appellants.
3. Defects in weighing scale and tare weight arguments by the appellants.
4. Tolerance in cotton yarn manufacturing permitted by authorities.

Analysis:
The appeal in this case challenges the order of the Collector of Central Excise (Appeals), Trichy, confirming a duty demand and penalty against the appellants. The lower appellate authority upheld the duty demand of Rs. 44,499.34 for unaccounted yarn and a penalty of Rs. 10,000 imposed by the original authority. The appellants claimed that yarn issued in cops for hanks, ultimately cleared duty-free, resulted in a shortage of 10,598.08 Kgs of cotton yarn. They argued about defects in the weighing scale and tare weight irregularities, but failed to provide substantial evidence supporting these claims. The appellants referred to a tolerance provision for cotton yarn manufacturing but did not produce any circular or trade notice to support their argument.

The Departmental Representative supported the lower appellate authority's reasoned decision. The Tribunal considered both parties' arguments and observed that the shortage of yarn was proven based on the appellants' records. The appellants' claims regarding weighing scale defects and tare weight irregularities were dismissed due to lack of evidence supporting these contentions. While acknowledging the tolerance allowance in cotton yarn manufacturing for assessment purposes, the Tribunal emphasized that this tolerance does not automatically favor the appellants. The Tribunal concluded that manufacturing errors in yarn count would average out over time and could not be consistently in favor of the appellants. Therefore, the Tribunal found no merit in the appellants' arguments and dismissed the appeal.

In summary, the Tribunal upheld the duty demand and penalty, ruling against the appellants' claims of weighing scale defects and tare weight irregularities. The Tribunal highlighted the permitted tolerance in cotton yarn manufacturing but concluded that this tolerance did not support the appellants' case. The appeal was ultimately dismissed based on the lack of evidence supporting the appellants' contentions and the averaging out of manufacturing errors over time.