2004 (8) TMI 141 - AT - Central Excise

Summary

Issues:
Denial of benefit under Notification No. 31/93-C.E. for yarn exceeding 210 deniers due to improper testing method.

Analysis:
The appellant, engaged in filament yarn manufacturing, appealed against denial of benefit under Notification No. 31/93-C.E. for the period 23-4-93 to 1-6-93 as the yarn was deemed to be more than 210 deniers. The adjudicating authority upheld the demand, leading to an appeal before the Tribunal. The Tribunal remanded the matter for a fresh decision, emphasizing adherence to principles of natural justice. Upon reevaluation, the demand was again confirmed by the adjudicating authority.

The core contention of the appellant revolved around the testing methodology employed. The appellant argued that the sample was not tested in accordance with the provisions of Note 2 of Chapter 54 of the Central Excise Tariff, which outlines the denier determination process. Instead, the sample was tested using Indian Standard IS 7703 (Part-I) 1990, a different procedure. Despite the appellant's objection, the matter was referred to the Director (Revenue Laboratories), who opined that both testing methods were essentially the same. The appellant maintained that since the sample was not tested as per the prescribed Tariff procedure, the benefit of the notification could not be denied based on denier exceeding 210.

Conversely, the Revenue contended that the sample was tested, yielding results indicating denier exceeding 210. The Revenue relied on the Director (Revenue Laboratories)'s clarification that the testing procedure aligned with Chapter Note 2 of Chapter 54 of the Tariff, refuting the appellant's claim of incorrect methodology application.

The Tribunal scrutinized the testing process and noted that the Chief Chemist had tested the yarn sample following Indian Standard IS 7703 (Part-I), deviating from the specific procedure outlined in Chapter 54 of the Tariff for denier determination. As the prescribed Tariff procedure was not adhered to during testing, the Tribunal deemed the demand unjustifiable. The Director (Revenue Laboratories)'s assertion of method equivalence did not sway the Tribunal's decision, emphasizing the necessity of following the prescribed Tariff procedure. Consequently, the impugned order was set aside, and the appeal was allowed, granting the appellant relief from the denial of benefits under Notification No. 31/93-C.E.