TMI Blog2014 (3) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellate authority. Confirmation of demands, mentioned in Para 5(iii) by the lower authorities does not survive. - Decided in favor of assessee. Benefit of Notfn No. 253/82. - Held that:- Lower authorities have confirmed demands of ₹ 5,36,670/90 as indicated in Para 5(iv) above on the ground that benefit of ‘NIL’ rate of duty under Notfn No. 253/82 has been wrongly availed as these fabrics were presumably have been subjected to dutiable processes and not exempted processes. It has been rightly contested by the main appellant that addresses of those buyers, who got the fabrics after undertaking exempted processes, were exiting in the records of the main appellant. - that demands cannot be confirmed against a manufacturer simply on the basis of few confessional statements and some note books/private records maintained by the workers/employees of a manufacturer. - Demand set aside - Decided in favor of assessee. Demand on the basis of a sample registrar found in the premises of M/s Jindal Synthetics - Held that:- It is strange that Revenue is conveniently considering a record available in the premises of M/s Jindal Synthetics to be the one pertaining to the main app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster maintained by the main appellant and not properly showing the same in the records was only a procedural lapse on appellant s part without any intention to evade payment of Central Excise duty . iii) That Para 5.2 of the Show Cause Notice demanding a duty of Rs 2,85,691/-, is based on a Rotary Programme book maintained by the workers of processed man made fabrics (MMF). It was argued by the Learned Advocate that main appellant only processes cotton fabric and has not printed any man-made fabrics on which this duty is demanded. It was his case that for printing cotton fabrics pigment colours are required and printing MMF disperse dyes/colours are required. That main appellant has no machinery to process MMF using disperse dyes/colours and has also not purchased any disperse dyes/colour. iv) That no trace of MMF was found in the factory premises of the main appellant on the date of stock taking. v) That against some of the lots in the private records the words J was mentioned which actually meant that such lots were pertaining to M/s Jindal Synthetics and not to the main appellant. vi) That demand of Rs 2,13,697/-, (1,76,230 L Mtrs), as per Annexure I to the Show Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lot could be printed for more than once to get the desired print. Hence it was his case that roller printing register will never show actual quantity of cotton fabrics printed on the rotary printing machine. x) That duty demand of Rs 93,942/- on 1,58,733 L Mtrs of fabrics, is based on sample register withdrawn from the factory premises of M/s Jindal Synthetics. That against several entries word J is mentioned before lot number which indicates that these fabrics were processed at the premises of M/s Jindal Synthetics. It was his case that all the lots shown to have been processed in Sample Register can not be considered to be the fabrics manufactured by the main appellant. xi) That an amount of Rs 2,90,734.40 as per Annexure VII to the Show Cause Notice, has been confirmed on the grounds that benefit of Notfn. No 253/82 is not applicable. The reasoning given by the Revenue is that fabrics of 40 width could be printed on hand printing tables of the main appellant. That Revenue s argument is that the fabrics, for which benefit of Notfn No. 253/82 was claimed, were more than 40, therefore, the same were machine printed by the main appellant. It is the case of appellant that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to the Show Cause Notice on 2/3/1998, nearly 4= years after the visit by the officers on 27/7/93. That both the OIO and OIA passed by the lower authorities are well reasoned and appeals filed by the appellants should be rejected. 5. Heard both sides and perused the case records. The issue raised by the Revenue in these proceedings is that main appellant has indulged in clandestine manufacture and clearance of cotton/manmade fabrics resulting into following demands : (i) Duty demand of Rs 61,220/- with respect to shortage found on the date of visit [Para 3(i) above] (ii) Duty demand of Rs 4334.90 on 7740 L Mtrs of cotton fabrics found and seized in second unit of the appellant [Para 3(ii) above] (iii) Duty demand on processing of man made fabrics (MMF) : Rs 2,85,691.00 Para 3(iii) above Rs 2,13,697.00 Para 3(vi) above Rs 37,644.25 Para 3(ix) above (iv) Duty demand by denying the benefit of Notfn No. 253/82. Rs 28,042.00 Para 3(vii) above Rs 1,40,364.00 Para 3(viii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified. 5.2 However, it has to be seen whether the above circumstantial evidences, alongwith certain private records maintained by the appellants, are sufficient to hold the remaining duty demands and to establish the clandestine activities of the main appellant. So far as manufacturing of manmade fabrics by the main appellant, mentioned in Para 5(iii) is concerned, it has been argued that main appellant does not have the facility for manufacturing of man made fabrics (MMF). It is observed from Para 1 of the OIO passed by the Adjudicating Authority that main appellant is engaged in the processing of cotton fabrics but investigation, inter-alia, alleges that MMF of Chapter 54/55 of Central Excise Tariff Act 1985 was also manufactured by the appellant. There was no stock of either grey or finished man made fabric found in the factory premises of the main appellant nor any such MMF was seized elsewhere. No cash was seized in these proceedings indicating purchase/sale of grey/finished man made fabrics allegedly manufactured and cleared by the main appellant. There is no indication of any additional purchase of raw materials required for processing of the man made fabrics by the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the recipients to know the nature of these fabrics supplied. Any such follow up could have made the factual position very clear whether the fabrics were obtained from the main appellant or M/s Jindal Synthetics. Based on these observations, it cannot be held that duty calculated, as per a sample register found in the premises of M/s Jindal Synthetics, was pertaining to fabrics clandestinely manufactured and cleared by the main appellant. 6. In the light of the above observations, appeal of the main appellant with respect to duty amounts, indicated in Para 5(iii), (iv) and (v) above, is allowed with consequential relief, if any. Appeal filed by the main appellant with respect to duty demands indicated in Para 5(i) and (ii) above, is rejected and accordingly, OIO dated 17/1/2007 of the Adjudicating Authority at Para 3.7 (ii), (iii), (vi) and (vii) is upheld. Looking to the quantum of demands confirmed following penalties against the appellant shown against each, under Rule 173Q/209A of the erstwhile Central Excise Rules 1944, as applicable, will be appropriate: (a) M/s Karnavati Synthetic Ltd. 103, GIDC, Vatva Rs 30,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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