1981 (5) TMI 121 - Board - Central Excise

Summary

Issues: Appeal against demand of duty on cotton fabrics exceeding 15 CMs in width without payment of Central Excise duty and imposition of penalty under Rule 173Q of the Central Excise Rules, 1944.

In this case, Howrah Enterprises filed an appeal against an order demanding duty on cotton fabrics exceeding 15 CMs in width without following Central Excise formalities and without paying Central Excise duty. The Collector imposed a penalty of Rs. 1.5 lakhs on the appellants under Rule 173Q of the Central Excise Rules, 1944. The appellants were granted a personal hearing by the Board where their Advocate submitted that the details of clearance of 'cotton beltings' were not provided as the allegations were that they had removed cotton beltings misdeclaring them as processed 'hair beltings'. The Advocate argued that the Collector presumed the beltings to be cotton beltings without conclusive evidence. The Advocate also contended that the test results of a sample drawn on 7-6-80 could not be retrospectively applied to past clearances of hair beltings. The Board noted that the appellants had furnished figures of clearances of 'hair beltings' and 'goods' but did not accept them as processed cotton beltings. The Board observed that the test results could only apply to the same lot from which the sample was drawn and there was no practice of prospective application until the next sample was drawn. The Board found that after 7-6-80, there were no clearances of 'hair beltings' exceeding 15 CMs in width, which could be considered as 'cotton beltings'. Consequently, the Board allowed the appeal, giving the appellants the benefit of the doubt and setting aside the original order.