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2016 (10) TMI 608 - CESTAT CHANDIGARH

2016 (10) TMI 608 - CESTAT CHANDIGARH - TMI - 100% EOU - denial of eligibility for concession - demand of duty - imposition of penalties appellant and three officers - cotton yarn and blended yarn - N/N. 8/97-CE date 01/3/97 - goods should have been cleared from raw materials produced or manufactured in India - whether appellant is eligible for concessional rate of duty and does the appellant has fulfilled the conditions for availing concession? - Held that: - all details were maintained by the .....

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sarily mean that all other domestic clearances were also made from imported cotton, it was not established by any record that all raw materials were not of Indian origin. - The impugned order are arbitrary and without sound legal basis - appellant eligible to claim exemption - appeal allowed - decided in favor of appellant. - Excise Appeal No. 2498-2501 of 2008 - Order No 61131-61134/2016 - Dated:- 11-8-2016 - Mr. Ashok Jindal, Member (Judicial) and Mr. B. Ravichandran, Member (Technical) Ap .....

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d on them. All these appeals are taken up together for disposal. 2. The appellants were clearing some of their manufactured yarn in the domestic market for which they are liable to duty in terms of Section 3 of central Excise Act, 1944. During the relevant time the appellant were availing concessional rate of duty for such clearances in terms of notification 8/97-CE date 01/3/97. The condition for exemption is that the goods should have been cleared from raw materials produced or manufactured in .....

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column - Brazilian . Further investigations were carried out by the Department resulting in the proceedings against the main appellant and others. The essence of the charge against the main appellant is that they have availed concessional rate of duty for the yarn cleared to the domestic market in terms of Notification 8/97-CE without fulfilling the condition of using raw materials produced or manufactured in India. In other word it is the case of the Revenue that the appellants used certain imp .....

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imported raw materials. As such, their eligibility for concessional rate of duty under Notification 8/97-CE was sought to be disallowed. In in impugned order the Original Authority confirmed the demand of ₹ 5,59,93,309/- he appropriated an amount of ₹ 3,31,81,418/- already paid by the appellant. He dropped the demand of ₹ 3,01,33,502/- in view of recalculation of duty demand based on submissions made by the appellant. He also imposed penalties on the main appellant and three of .....

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ppellant submitted that this record is maintained at the godown stage and has no relevance relating to composition of yarn for manufacture. We find the main thrust of the finding by the Original Authority is on the failure of the appellant in satisfactorily establishing that they have maintained separate accounts for consumption of imported raw material and indigenous raw material from the beginning. The learned Counsel for the appellant submitted in detail the various documents and records main .....

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rly show the nature and composition of yarn manufactured and cleared to Indian market. We have seen end to end one such illustration regarding lot number 19001 which is one of the lots alleged to have been manufactured using imported cotton. It is seen that the invoices issued indicating such lot number show the composition of yarn. We note that the entire accounting process is computerized. The lot number is the main linking reference to all documentation and I can be established by all the lin .....

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cuments maintained by the main appellant and accordingly a team of officers visited the appellant s factory in April 2008 and conducted verification of all the relevant records with reference to the claims made by the appellant. We have directed the Revenue to submit a copy of such verification report. The learned AR submitted a letter dated 05/08/16 received from office of the Commissioner, Central Excise, Chandigarh - II. On perusal of the noting by the officers who conducted the verification .....

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he consumption of indigenous fiber. Further, the offices reported that the appellants are maintaining accounts from 2002-2003 in Oracle software and they are not able to verify whether the records were as maintained in 2002-2003 or were prepared after the case was booked. They also suggested that this can be only verified by a computer export. We find that no such attempt has been made by the Revenue. Further, it is apparent that ta suspicion is created by such remark of the officers without any .....

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dence except for entries in DYGR which has been refuted with categorical evidence of records maintained by the appellants. We find no merit in the findings of the Original Authority to support the demand. We also note though the initial check was made by officers in March 2003, no further follow up verification was done, as per records, till 2008. Then a doubt was raised about real time nature of records. This log gap of many years in follow up verification, if any, has not been explained by Rev .....

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t the computerized print outs of the report were not old and seems to be fresh thought pertains to the period 2002-2003. He further relied on Export Detail Report, receipt Detail Report and Lot Detail Report recovered from the factory in April 2003 to indicate that there is no evidence to show that a particular lot has been manufactured from indigenous or imported fiber. We find the reports are linked to not number and the nature of cotton yarns cleared by the appellant is available. As already .....

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