2005 (10) TMI 354 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal upholding imposition of redemption fine, penalty, and duty demand.
- Unaccounted textured and twisted yarn found in factory.
- Excess quantity of twisted yarn in approved godown unaccounted in RG-1 Register.
- Duty liability on consumed textured yarn for twisted yarn manufacture.
- Applicability of Notification No. 4/97 exemption.
- Failure to file D-3 immediately for goods received back.
- Confiscation, redemption fine, and penalty imposition validity.

Analysis:
1. The appeal challenged the Order-in-Appeal upholding redemption fine, penalty, and duty demand. Central Excise Officers found unaccounted textured and twisted yarn in the factory during a visit. Additionally, excess twisted yarn in the approved godown was unaccounted in the RG-1 Register, leading to a show cause notice for confiscation and duty demand.

2. The first issue involved unaccounted textured and twisted yarn in the factory. The appellant claimed the goods were received back from another company and filed a D-3, but delayed due to the presence of Anti-Evasion officers. The second issue concerned the excess twisted yarn in the godown, argued to be accounted for in a private register and not intended for duty evasion.

3. The appellant contended that duty liability did not apply to goods received back and that the duty was discharged when the twisted yarn left the factory. The Department argued that duty on textured yarn must be discharged immediately upon consumption for twisted yarn manufacture.

4. The Tribunal analyzed the documents and found the goods were indeed received back as claimed by the appellant. The unaccounted goods in the godown were acknowledged in a private register, leading to the decision to set aside confiscation and redemption fine.

5. Ultimately, the Tribunal allowed the appeal, setting aside the confiscation and redemption fine. The duty demand on the consumed textured yarn was not upheld for goods received back, while duty on textured yarn used for twisted yarn manufacture was considered discharged upon removal from the factory.

6. The judgment highlighted the importance of proper documentation and adherence to duty discharge regulations, ultimately leading to the favorable decision for the appellant based on the specific circumstances and evidence presented during the proceedings.