2006 (5) TMI 324 - AT - Central Excise

Summary

Issues:
Challenge to reduction of duty demand based on exemption withdrawal and clearance details.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved a challenge by the Revenue against an order-in-appeal reducing the duty demand from Rs. 1,75,616 to Rs. 69,246.37. The Revenue argued that the exemption from Central Excise duty for cotton yarn manufactured from cotton waste was withdrawn from 1-3-94, with only yarn in hank form being exempted thereafter. The respondents were clearing yarn in hank form as well as on cones, which was deemed liable for duty. The adjudicating authority confirmed the demand based on figures submitted by the respondents, but the Commissioner (Appeals) modified the figures without substantial evidence, leading to the reduction in duty amount.

The adjudicating authority had relied on the figures provided by the respondents regarding the clearance of yarn on cones, which amounted to Rs. 30,54,193.98, resulting in a duty of Rs. 1,75,616.15. The respondents had already deposited a portion of this amount, leaving a balance payable. However, before the Commissioner (Appeals), the respondents submitted a revised chart and an affidavit claiming that a lesser quantity of yarn was actually cleared on cones. Despite the lack of concrete evidence supporting this claim, the Commissioner (Appeals) accepted it and reduced the duty demand.

In light of the above, the Appellate Tribunal found merit in the Revenue's appeal, setting aside the order reducing the duty demand and restoring the original order-in-original. The Tribunal emphasized that the reduction in duty was based solely on the revised calculation supported by an affidavit without any substantial evidence, making it unsustainable. Therefore, the appeal was allowed in favor of the Revenue, highlighting the importance of providing concrete evidence to support any modifications to duty calculations in such cases.

This detailed analysis of the judgment showcases the key legal arguments, the basis for the Revenue's challenge, and the Tribunal's reasoning in overturning the reduction of duty demand, emphasizing the necessity of evidence in such matters.