2014 (12) TMI 155 - AT - Central Excise

DTA Clearances - clearances of acrylic yarn, polyester/blended yarn and blended waste in DTA - Levy of Additional Duties of Excise (Textiles and Textile Articles) - Imposition of interest and penalty - Notification No. 23/2003-C.E., dated 31-3-2003 - Held that - Chartered Accountant s certificate is not a document on the strength of which duty exemption can be claimed. It is based on the records maintained by the appellants, the eligibility to exemption has to be determined. As regards the contention of the appellant that in respect of polyester blended yarn, inasmuch as they have not imported any polyester fiber, the goods should be deemed to have been manufactured out of indigenous material. Though there is some merit in this contention, there is no evidence forthcoming with respect to the composition of blend. If the blended yarn consist of acrylic fiber, even if polyester yarn might not have been imported, inasmuch as acrylic fiber has been imported, the appellant would not be eligible for the duty concession under Notification No. 23/2003. Further, to claim the benefit under the aforesaid notification, the clearance to DTA has to be in terms of the EXIM policy mentioned therein. The composition of the blended yarn could have been easily ascertained from the sales invoices and the prices quoted. This is the second round of litigation and during the first round, the matter was remanded to the adjudicating authority with appropriate directions in this regard. In the absence of a clear finding recorded by the adjudicating authority based on documentary evidences, we are constrained to remand the matter back to the adjudicating authority once again for verifying all the facts involved and thereafter pass an order in accordance with law - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Duty demand on acrylic yarn, polyester/blended yarn, and blended waste in DTA; Incorrect duty calculation; Verification of raw material sources; Benefit under Notification No. 23/2003; Compliance with EXIM policy for duty concession.

Analysis:
The appeal challenges a duty demand confirmed against the appellant for clearances of acrylic yarn, polyester/blended yarn, and blended waste in DTA. The demand includes two parts: one for a specific amount and another for a larger sum. The appellant argues that a portion of the demand has already been paid under protest, reducing the balance due. They contend that duty rates were incorrectly applied, leading to a higher demand. The appellant asserts that goods cleared into DTA were manufactured from domestically procured raw materials, which should affect duty liability. However, the Revenue argues that the appellant failed to maintain records showing the source of raw materials, specifically for acrylic fiber and polyester staple fiber. The jurisdictional Superintendent's verification revealed imports of acrylic tow and fiber, raising doubts about the indigenous sourcing claim.

The appellant maintains that they did not import polyester fiber during the period in question, impacting the duty concession eligibility. The Revenue challenges this claim, highlighting the lack of evidence regarding the composition of the blended yarn cleared into DTA. They argue that the appellant failed to prove that the yarn was solely polyester/cotton blend, as claimed. The duty demand on waste is also contested due to the lack of segregation between different waste types. The appellate authority notes the absence of clear findings based on documentary evidence in the adjudicating authority's order. Consequently, the matter is remanded for detailed examination, directing the appellant to provide evidence supporting their claims regarding the composition of the blended yarn and compliance with the EXIM policy for duty concession.

In conclusion, the appeal is allowed by way of remand, emphasizing the need for a thorough review of all facts and evidence by the adjudicating authority to ensure a lawful decision.