TMI Blog2001 (3) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... cs. As per the ledger of M/s. Ambika Textiles, Burhanpur, this party had supplied to the appellants the aforestated cotton fabrics against 9 bills during the months of June and July, 1984. There was no entry of this quantity of cotton cloth in their Form IV register. The suppliers of this cloth had received a sum of Rs. 60,482.96 in cash. Another quantity of 1,03,312 mtrs. of cotton cloth were supplied to the appellants by M/s. Ambika Textiles against 14 No. bills during July to September, 1984. The search of the premises of another supplier - M/s. Ram Lal Durgadutt Bros., Ahmedabad on 9-9-1985 and scrutiny of their records, it was further revealed that the appellants had purchased goods measuring 93,186.5 mts. against 11 No. bills during November, 1984 to February, 1985. All these quantities were not entered into their Form IV register. Consequently, it was averred by the investigating authorities that cotton fabrics measuring 2,62,691.5 mts. was not accounted for in Form IV register by the party and the same was used by them for the manufacture of coated cotton fabrics which was subsequently cleared without payment of duty. Taking the value of the coated cotton fabrics @ Rs. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r product under this Tariff Item, they had all along protested the Department's approval under the said heading. The Collector in his order has observed that all these contentions are of academic interest only and have no bearing on the issue in hand. He has observed that since the representative samples subject matter of test reports were not from the goods allegedly clandestinely removed, therefore, no reliance could be placed on such reports. The Collector has further observed in his order that the party produced a protest letter dated 6-6-1981 on the issue charging the AED as also regarding availing of the benefit under Notification No. 201/79. However, their protest was not categorically against the classification under Tariff Item 19(III). In any case, it is observed that after approval of the Classification List by the Department under Tariff Item 19(III), the protest seized to have any value especially when for the subsequent periods the party had claimed classification of their product under Tariff Item 19(III) time and again. It is also observed that approval of their Classification List under Tariff Item 19(III) was not appealed against by the party and once the Classifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able goods during October, 1984 which is apparent from Form IV register. He has stated that since the main raw material is the base fabrics and the assessee has to maintain an account of this raw material in Form IV register, the reference to the shortage of other raw materials in the allegations is not relevant/necessary. It is observed that a value @ Rs. 10/- per meter is taken in the Show Cause Notice as an average between the maximum and minimum rates shown in the Price Lists. The Collector in his order has observed that taking this rate ignoring the quantum of sales made at the maximum and minimum prices would be artificial. The Collector has therefore taken an average price @ Rs. 4.85 per meter as by and large, the product manufactured by the party was of cheap variety. The Collector has also rejected the claim of the party for exemption under Notification No. 128/85-C.E., dated 24-5-1985 as the suppression of production and clandestine removal pertained to a period prior to 21-2-1985 whereas the exemption notification is dated 24-5-1985. Accordingly, the Collector in his order has held that the quantity of cotton fabrics not accounted for during the period 1984-85 (upto 27-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only fortified and confirmed by the test reports made available to them on 12-4-1990. Therefore, the Collector had no basis by which he could deny the nature of the goods to that of the samples drawn. 8. We have considered these submissions. In our view, controversy raised by the appellants at this belated stage with regard to the classification of the cotton coated fabrics under consideration is wholly uncalled for. The issue relating to the classification of the cotton coated fabrics of the type under consideration, whether they would fall under Tariff Item 19(III) or under Tariff Item 68 of the then existing tariff is no more res-integra, as the same has been fully resolved by the judgment of the Hon ble Supreme Court in the case of CCE Hyderabad v. M/s. Fenoplast (P) Ltd., 1994 (72) E.L.T. 513 (S.C). In this judgement, the Apex Court on taking into consideration the whole of the entry under Tariff Item 19(III) including the proviso and appended Explanations under it came to the conclusion that the predominance and percentages referred to in respect of the coated cotton fabrics in main clause of this tariff entry shall be in relation to the base fabrics which are impregnated, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i India (P) Ltd. had procured large amount of raw materials of the cotton fabrics from time to time from the manufacturers of these textiles i.e., M/s. Ambika Textiles, Burhanpur which were received in the factory of the appellants but not accounted for in the raw material register in Form IV Register. The ledgers of the textile manufacturers vouched for the supply of these materials to the appellants. The suppliers of the cotton fabrics received the payment for the material in cash which is reflected in the ledger of the M/s. Ambica Textiles. The detailed particulars of these suppliers of the cotton textile fabrics are given in the opening paras of this order and same are not in dispute. In fact, Shri R.P. Chaukhani in his statement dated 1-8-1985 and 20-12-1985 had admitted that they had purchased these goods either in the name of M/s. Chaukhani India (P) Ltd. or M/s. Plastikot (Sundarsan) Industries and had used the same in the manufacture of PVC coated fabrics in their factory. In respect of the goods purchased from M/s. Ambika Textiles, Burhanpur and M/s. Haryana Textiles etc., he admitted that these goods were received by them but the same were returned. The Collector had rej ..... X X X X Extracts X X X X X X X X Extracts X X X X
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