TMI Blog1998 (7) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... 49,969.80. (ii) Revised demand for the period 28-10-1986 to 27-11-1986 amounting to Rs. 17,862.86. (iii) Penalties (a) On the Mills Rs. 1 lakh (b) On G.M. Rs. 10,000.00 (c) Office Manager and the two Factory Managers each Rs. 5,000.00 2. The Show Cause Notice dated 7-5-1986 in question divides the issue into two parts as follows :- Part I : Relating to the period April, 1982 to November, 1986 based only on the private register of the Mills for production and quality control (Annexure - A to SCN). Part II : Relating to the period from 28-10-1996 (sic) to 26-11-1986 when unlike Part I the yarn produced was still in the bonded store room (Annexure - B to SCN). 3. Heard learned Advocate Shri K. Nara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation here is IS : 1315-1977. 6. Learned Advocate also challenged the conclusion in Para H page 21 of Order-in-Original that they had tempered with samples for their tests. There is no evidence to show this, it is a biased conclusion and an ex parte one, particularly because the Asst. Director of National Test House (NTH) was available for cross-examination but learned Collector did not want it. Since 17 out of 27 tests of NTH showed counts of 42S contrary to Dy. Chief Chemist s findings, conclusion fairly drawn should be in favour of assessee. 7. With respect to Part I of the case (Annexure A of SCN) covering period from 1-4-1982 to 27-10-1986 he argued as followed :- (a) Department has responsibility to periodically draw and test c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbatore Pioneer Mills reported in C.B.E. C. Case-law Digest of 1972; (iv) the letter of M/s. Balaji Knitting Mills referred to in para 27 of Order-in-Original is used to draw a wrong conclusion by suppressing the last two sentences thereof which reads as follows : They complain that they have lost heavily in the previous supply of 50 bags because the count was coarser. Please look into this. This evidence clearly shows that complaint is of supply of coarser counts, quite contrary to department s allegations; (v) Rule 9(2) cannot be involved as there is not clandestine removal. Cited N.B. Sanjana in 1978 (2) E.L.T. J 399 (S.C.) followed in Air Conditioning Corporation - 1985 (19) E.L.T. 206 (Tribunal). 8. He therefore concluded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipped with modern technical equipment. Therefore, we cannot brush aside the technical accuracy of its reports. (iii) Merely because CRCL is not equipped to test as per IS 1315 : 1977 and hence tests to older standards, we cannot subscribe to the view that ISI standard is irrelevant to the issue. The ISI is the only legally prescribed standard of the Central Government. Therefore, we have to apply the Hon ble Supreme Court s decision in the case of DCM (supra), particularly as learned JDR has not cited any ruling to the contrary. Hence the judgment of the Apex Court is the law of the land. (iv) It is in this context that the refusal to allow cross-examination of the Dy. Chief Chemist etc. is to be viewed as a serious violation of princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce/arguments to justify their rejection. But strangely, the impugned Order-in-Original is silent. When this is read with the deposition of the Superintendent regarding Test Memo 5/85, dated 29-10-1985, this silence creates serious doubts in our minds. The just and legally correct conclusion to be drawn is that this silence indicates that either no tests were conducted or the results do not support their case. If the former is true, then as per case-law cited in 1985 (15) E.L.T. 407 (supra) the last sample tested would be valid during this period. The Order-in-Original is silent on this. It is nobody s case that no sample was ever drawn and tested, as no classification list is approved finally without the test report. On the other hand, if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts, therefore any duty demand based solely thereon, without adequate circumstantial corroboration, does not survive. Benefit of doubt must, in such a case, go to the appellants. (iv) We are inclined to accept the true import of the letter of M/s. Balaji Knitting Mills relied upon in the impugned Order-in-Original, by reading the entire letter. Their complaint that they have received coarser counts yarn is very clearly worded. Therefore, this corroborative evidence, instead of helping the case of Revenue, actually damages it substantially. No other corroborative evidence is forthcoming. There is no corpus delecti - no seizure of goods to prove that count has been mis-declared. No other corroborative evidence like statements of other buy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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