TMI Blog2022 (9) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... tributed to handloom weavers were taken of by the trades and other agencies. Thus, on analysing the evidence the adjudicating authority held that the system was evolved only to ensure that the sale should look like a sale from the spinning mill, the noticee no.1 to the respondent, the noticee no.2 and this was done in order to avail the benefit of exemption whereas the actual sale took place between the spinning mill and the private traders while the respondent and the other apex society merely acted as a commission/selling agent thereby earning commission at the rate of 1.5% as profit. Thus, the adjudicating authority records that this point could not be controverted by the respondent neither at the time of making written submission nor at the time of personal hearing. The adjudicating authority held that the certificates declaring that the yarn is going to be used only on handlooms as issued by the respondent and the other apex society are not based on factual verification but only based upon the certificate issued by the spinning mill concerned. Thus, the adjudicating authority held that the conditions stipulated in the notification for the purpose of exemption are not favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so called purchase of cross reel hank yarn by them from the first noticee, the spinning mill, was going to be used only on handlooms was factually wrong since such yarn even if considered to have been purchased from the spinning mill (the first noticee) was not sold by them to any handloom unit nor did they have any system devised for this purpose to ensure that such yarn really goes to the use only on handloom. Therefore, the first noticee namely, the spinning mill, was directed to show cause as to why the Central Excise Duty should not be demanded and recovered from them in terms of Section 11A(1) of the Act. So far as the respondent is concerned, they were called upon to show cause as to why the penalty should not be imposed in terms of Rule 209A of the erstwhile Rules read with Rule 26 of the Central Excise Rules, 2001. The adjudicating authority, by order dated 29th December, 2003 affirmed the proposal of the show cause notice and imposed penalty on the respondent. Aggrieved by the same, the respondent had preferred appeal before the learned Tribunal which was allowed and aggrieved by the same, the revenue is before us by way of this appeal. We have heard Ms. Manasi M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g has been recorded by the adjudicating authority : .. The following facts clearly revealed from the scrutiny of the documents and also depositions made by the various persons. It has been clarified that in the event of fixing the minimum rate of sale by Noticee No. 1 at Rs. 50/- per unit and quoting of Rs. 70/- per unit by a trader against such minimum rate. Tantuja / Tantusree would have sent authorization for that traders for Rs. 70/- per unit and accordingly the mill (Noticee No. 1) would have issued Central Excise Invoices in the name of trader at the sale rate of Rs. 70/- per unit and Tantuja would get 1.5% commission for such sale. This indicates that Tantuja / Tantusree had no role for negotiation with the traders, since, otherwise. If Tantuja / Tantusree were the real purchasers, they would have definitely preferred to purchase the yarn from the Mill at a rate of Rs. 50/- per unit and would have collected Rs. 70/- per unit from the Trader thereby making a straight profit of Rs. 20/- per unit instead of getting only 1.5% of Rs. 70/- i.e. Rs. 1.05 p. per unit as commission. This point has not been controverted by the Noticee and there has been no effective defence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.1) and not on the basis of verification of facts. Further, the adjudicating authority found that the respondent was not at all aware as to where the yarn is ultimately going since they do not have any control on the sales of the traders to whom the yarns are actually sold. Therefore, it was held that the very spirit and the intention for which the notification has been issued giving benefit of duty of excise of cross reel hank yarn meant for the use of weavers belonging to handloom sector, has been totally defeated by the manner in which the transactions have taken place. Further, the adjudicating authority pointed out that even the traders who are the real buyers of the said hank yarn manufacturer and marketed by the spinning mill, noticee no.1, did not know and could not give any guarantee that the yarn is going to be used only on handlooms and factually it was established that the yarn is subsequently sold to various authorities in and outside the State on which the respondent had no control. Therefore, the adjudicating authority held that the certificates declaring that the yarn is going to be used only on handlooms as issued by the respondent and the other apex society are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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