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TMI Blog2007 (2) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals). 2. The brief facts of the case are that the appellants are engaged in the manufacture of Chenile yarn. On 7-3-2000, the officers of customs visited the factory premises of the appellants and it was found that a truck loaded with yarn was standing outside the factory. The invoices produced by the driver showed that the goods are multiple folded yarn or cabled yarn which attract n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed in respect of the goods found in the truck on the ground that the same were cleared without payment of duty. The credit of Rs. 1,65,042/- was denied in respect of the inputs which were found short. A penalty of Rs. 3 lakhs was imposed under Rule 173Q and penalty of Rs. 23,040/- was imposed under Section 11AC of the Act. 3. The Commissioner (Appeals) on appeal filed by the appellants, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the order while imposing penalty, therefore, penalty is not justified. 5. The contention of revenue is that at the time of visit of officers, the Managing Director of the company was present and verification was conducted in his presence and no such explanation that the goods found in excess is only waste and not Chenile yarn, was given by the M.D., therefore, it is only a after thought. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 173Q is not sustainable, as sub-clause of Rule 173Q under which the penalty is imposed is not mentioned. The appellants also relied upon the decision of Supreme Court in the case of Amrit Food Co. Ltd. supra. In that case, the Hon'ble Supreme Court has held that as the Commissioner has failed to indicate as to under which sub-clause penalty is imposed, the penalty imposed under Rule 173Q w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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