TMI Blog2023 (2) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed and the substantial question of law is answered in favour of the revenue. - THE HON BLE JUSTICE T.S. SIVAGNANAM AND THE HON BLE JUSTICE HIRANMAY BHATTACHARYYA For the Appellant : Ms. Rajashree V. Kundalia, Adv., Ms. Manasi Mukherjee, Adv. ORDER The Court : This appeal filed by the revenue under Section 35G of the Central Excise Act, 1944 (the Act for brevity) is directed against a composite order dated 14th July, 2006 singed on 18th August, 2006 passed by the Customs, Excise Service Tax Appellate Tribunal, East Zone Bench at Kolkata (the Tribunal). The appeal was admitted on the following substantial question of law: Whether the order of the Tribunal setting aside the order of penalty on the respondent w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious trading concern who appear to be merchants and traders of yarn and not handloom weavers. The respondent contended before the adjudicating authority that the private traders were engaged by them for lifting yarn from the mills on their behalf for subsequent delivery to the weavers even in some cases on credit basis and even though the goods were lifted by the private dealers, the ownership continued to remain with the respondent and the sale and purchase took place between the producing mill and the respondent (Apex Bodies) and the private traders had no role to play in the matter of sale and purchase. The adjudicating authority examined the stand taken by the respondent and the other noticee namely, the noticee no.3 and pointed out tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been found that the role of two Apex Bodies is that if a Commission Agent of Noticee No. 1 as well as of other spinning mills of the Government of West Bengal and their function, with reference to the sale of cross reel hank cotton yarn produced by various Spinning Mills including Noticee No. 1 is only for routing the payments from the traders who are the real purchasers/buyers of such yarn. The Noticee could not explain satisfactorily as to why commission / margin has to be paid to the Apex Bodies in relation to cross reel hank yarn when they are claiming that the Apex Bodies are the real purchasers of the yarn and not merely a commission or selling agent. From the above finding it is seen that the respondent has not controverted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the certificates were issued by the respondent based on the certificates issued by the spinning mill (noticee 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal had rendered such a finding. The tribunal has not rendered any finding as to the evidence which was available before the adjudicating authority who has clearly brought out the modus operandi which was adopted in the entire process. The evidence also pointed out that the respondent and other apex society have merely acted as a commission agent by receiving commission at the rate of 1.5% and by their conduct have defeated the very purpose for which the notification was issued. With regard to the certification which was also one of the conditions under the notification, the learned tribunal has not examined the aspect pointed out by the adjudicating authority that the certificate issued by the respondent and the other apex body was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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