2009 (6) TMI 730 - AT - Central Excise

Summary

Issues: Alleged clearance of 100% polyester fabric as cotton fabrics, differential demand of duty, imposition of penalty, authenticity of dealer statements, confirmation of demand of duty, type of duty confirmed, applicability of penalty.

Analysis:

1. Alleged Misrepresentation of Fabrics:
The case involved the appellant allegedly clearing 100% polyester fabric as cotton fabrics. Central Excise Officers conducted checks revealing clearance without payment of duty. Investigations indicated the use of brand names for polyester fabrics instead of cotton. Statements from dealers supported the claim of polyester fabric misrepresentation.

2. Confirmation of Differential Demand and Penalty Imposition:
Proceedings were initiated against the appellant for confirming the demand of duty and imposing penalties. The Assistant Commissioner confirmed the duty demand and imposed penalties on the appellant and a partner. The Commissioner (Appeals) upheld the decision, leading to the appeal.

3. Verification of Dealer Statements:
The appellant contested the dealer statements, arguing applicability only to specific dealers. However, the SDR argued that brand names disclosed by dealers indicated polyester fabrics. The tribunal found merit in the SDR's contention, emphasizing the importance of brand names in determining fabric composition.

4. Confirmation of Duty Demand:
The tribunal confirmed the duty demand related to clearances made to a specific entity, highlighting the consistent modus operandi of fabric misrepresentation by the appellant. Evidence showed discrepancies between declared fabric types and actual compositions.

5. Type of Duty Confirmed and Penalty Applicability:
The appellant claimed the duty was under a specific Act where no penalty provision existed. Referring to a Supreme Court decision, the tribunal remanded the matter to determine the duty type and assess penalty applicability in line with legal precedents.

6. Judgment and Remand:
The tribunal partly rejected the appeals and partly remanded the matter for further adjudication on the penalty aspect. The decision aimed to clarify the duty type and align penalty imposition with legal provisions, ensuring a fair and accurate resolution of the case.