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M/s. Uniworth Textiles Ltd. Versus C.C.E. Raipur

2016 (5) TMI 609 - CESTAT NEW DELHI

100% EOU - shortage of 7734.79 meters of fabrics noticed when the fabrics cleared was received after job work - shortage is approximately 3% of the total quantity of fabrics sent for job work and the shrinkage in the fabrics of the type sent for job work ranges from 2.01% to 8.49% - Held that:- it is evident that there has been no illegal diversion of the goods sent for job work and the goods sent for job work were duly processed by the job workers and the resultant product (i.e. the processed f .....

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ons of Notification 52/2003-Cus dated 31.03.2003 and Notification 22/2003 date 31.03.2003 - Held that:- the foremost consequence of contravention of provisions of an exemption notification is denial of benefit thereof. It is found that the adjudicating authority has allowed benefit of the said notification to the appellant. It means that the so called contravention of the provisions of the said notifications were treated to be so insignificant as not to result in denial of the benefit thereof. I .....

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t : Mr. Govind Dixit DR ORDER PER R. K. SINGH: Appeal has been filed against the Order-in-Original dated 6.2.2006 in terms of which Central Excise duty demand of ₹ 25,63,536/- has been confirmed along with penalties. The brief facts of the case are as under: The appellant is a 100% EOU manufacturing all wool fabrics and other blended fabrics falling under chapters 50, 51 and 55 of Central Excise Tariff. It obtained permission from the Assistant Commissioner for sending grey fabrics for job .....

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exported from the job workers premises. The primary adjudicating authority vide the impugned order held that the goods sent for job work under the said 164 challans were either exported from the job workers premises or were received back except that the quantity received back was short by 7734.79 meters, and therefore, the duty was recoverable on the said quantity short received and consequently the impugned order confirming the demand was passed. 2. Ld. Advocate for the appellant has contende .....

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e of 7734.79 meters in the quantity received back due to shrinkage. * The verification report itself stated that the shortage was because of shrinkage during job work and the shrinkage is approximately 3% only, as the total quantity sent under 164 challans was 229050.60 meters and therefore question of recovering duty on such shortage should not arise. * Textile Committee in its report dated 09.05.2008 submitted on 11.12.2015 based on a study of shrinkage of various types of fabrics manufactured .....

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of such fabrics. 4. We have considered the contentions of both sides. 5. It is seen that the entire demand pertains to the shortage of 7734.79 meters of fabrics which was noticed when the fabrics cleared under 164 challans was received after job work. We find that this shortage is approximately 3% of the total quantity of fabrics sent for job work and as per the report dated 09.05.2008 of the Textile Committee, Ministry of Textile, Export Promotion and Quality Assurance Division, Nagpur, submitt .....

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job work. This clearly implies that the shortage was not a consequence of any diversion of grey fabrics sent for job work. Given the very fact that the fabric was subjected to job work of such nature which results in shrinkage of fabrics, the total quantity which would be received after such job work would always be less than the quantity sent in terms of area of the fabrics. This, in turn, implies that there was no illegal diversion and the entire fabrics which was sent for job work under 164 .....

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