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M/s Superior Fabrics & Sudhir Agrawal, Managing Director Versus Commissioner of Central Excise, Ghaziabad

Penalty u/r 26 - manufacture - Tribunal had directed the Original Authority to first establish that appellant had the capacity to manufacture the quantity of Mosquito Bednets supplied to HSCC during the Financial Years 2000-01 & 2001-02 and then to give finding whether the appellant had manufactured the same in his factory - Held that: - the Original Authority could not give the sustainable finding on the capacity of manufacture possessed by the appellant/manufacturer during the said Financial Y .....

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ising out of common impugned Order-in-Original No. 01/Commr./GZB/2009 dated 12/05/2009 passed by Commissioner of Central Excise, Ghaziabad. Therefore, the said two appeals are taken together for decision. 2. The brief facts of the case are that the appellants were issued with a Show Cause Notice dated 02/07/2003, wherein it was alleged that during the Financial Year 2000-01 they were engaged in the manufacture of Ready Made Garments & Mosquito Bednets having value of clearance of ₹ 4,6 .....

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e duty for the Financial Years 2000-01 & 2001-02 amounting to ₹ 60,14,356/- & 30,59,777/- respectively from the appellant/manufacturer. There were proposals for imposition of penalty. The other appellant was called upon to show cause as to why personal penalty should not be imposed on him under Rule 26 of the Central Excise Rules, 2002. The said Show Cause Notice was adjudicated through Order-in-Original No. 05/Commr./GZB/2004 dated 24/03/2004, wherein the said OIO confirmed the de .....

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nsidered the submissions made at length by both the sides and perused the record. The whole issue in this case is regarding the capacity to manufacture the huge quantity of mosquito nets that was supplied by the appellant No. 1 to HSCC. It is undisputed that the appellant has posed before the HSCC as manufacturer of mosquito nets. At the same time, the capacity of the appellant to manufacture such a huge quantity of mosquito nets has to be taken into consideration before arriving at the conclusi .....

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by the appellant No. 1. We also find that the balance sheet of the appellant for the relevant period do not indicate any substantial purchase of plant and machinery which would indicate the capacity of the appellant to manufacture the goods in question. The said balance sheet and Form 3CD (Audit report for the Income Tax purposes), would indicate that during the relevant period, the appellants were working on a very limited capacity plant and machinery. If the appellants have to produce such a h .....

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nable to come to any conclusion whether the appellant was able to manufacture such a huge quantity of mosquito nets in his factory premises. Coupled to this confusion, the certificate given by the Chartered Engineer indicates that the appellant could manufacture 36,000 Nos. of mosquito nets with the available sewing machines would indicate that there was some miss-match of the supply and the production capacity of the appellant. The lower authority has to consider all the relevant evidences whic .....

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cating Authority, relying upon the evidences. With above finding the matter was remanded to the Original Authority to arrive at a fresh conclusion accordingly to the above findings. 3. In compliance to the said remand order the Original Authority re-adjudicate the matter through impugned Order-in-Original No. 01/Commr./GZB/2009 dated 12/05/2009, wherein the Original Authority once again confirmed the entire remand and imposed equal penalty on the appellant/manufacturer and further imposed penalt .....

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me in his factory. The finding by the Original Authority on the same is at Para 3.3 of the impugned Order-in-Original No. 01/Commr./GZB/2009 dated 12/05/2009. He contended that the said finding is totally based on presumptions and assumption and submitted that the Original Authority held that during approximately two years i.e. 2000-01 & 2001-02, the appellant had 17520 hours (365 days x 24 hours) and during the relevant period i.e. 2000-01 & 2001-02 the factory of the appellant was havi .....

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