2002 (7) TMI 307 - AT - Central Excise

Summary

Issues:
1. Central Excise duty evasion on printed man-made fabrics.
2. Confiscation of seized fabrics and imposition of penalties.
3. Appeal against the order of the Joint Commissioner.
4. Classification of goods under Central Excise Tariff.

Issue 1: Central Excise duty evasion on printed man-made fabrics
The case involved the officers of Central Excise Preventive, Amritsar, discovering that a firm was engaged in printing grey fabrics with power and steam on a job work basis. The firm was found to be clandestinely removing man-made fabrics, leading to a show cause notice being issued for duty evasion amounting to Rs. 3,68,920. The firm denied contravention, claiming to manufacture scarves chargeable to nil duty rate. The Joint Commissioner confirmed the demand and ordered confiscation of seized fabrics, imposing penalties and interest under relevant Central Excise provisions.

Issue 2: Confiscation of seized fabrics and imposition of penalties
The Joint Commissioner confirmed the duty demand, ordered confiscation of 270 meters of seized man-made fabrics valued at Rs. 4,950, with an option for redemption on payment of a fine. Additionally, a penalty of Rs. 3,69,020 was imposed on the firm under Section 11AC of Central Excise Act, 1944. While the partner of the firm was also put on notice for a penalty under Rule 209A, no order was passed against him.

Issue 3: Appeal against the order of the Joint Commissioner
M/s. Wooltex Industries filed an appeal before the Commissioner (Appeals), who allowed the appeal based on the firm's argument that they printed scarves on grey fabrics, which was not disputed by the lower authority. The Commissioner held that the printed fabrics could only be used as scarves, thus chargeable to nil duty rate under the Central Excise Tariff, and allowed the appeal.

Issue 4: Classification of goods under Central Excise Tariff
In the Revenue's appeal against the Commissioner (Appeals) order, it was noted that the Revenue failed to specify under which heading of the Tariff Schedule the goods were to be classified and the duty rate applicable. The Tribunal found the demand for duty recovery misplaced due to the absence of such classification in the proceedings, leading to the dismissal of the appeal as non est ab initio.

This detailed analysis covers the central issues of Central Excise duty evasion, confiscation of seized fabrics, appeal proceedings, and the classification of goods under the Central Excise Tariff, as addressed in the judgment by the Appellate Tribunal CEGAT, New Delhi.