1989 (6) TMI 174 - AT - Central Excise

Summary

Issues Involved:
1. Validity of the chemical test results.
2. Justification for imposing duty on the entire yarn produced.
3. Appropriateness of the penalty imposed.
4. Request for retesting samples in a different laboratory.
5. Allegations of bias and threats from the Chief Chemical Examiner's office.

Issue-wise Detailed Analysis:

1. Validity of the Chemical Test Results:
The appellants challenged the test results conducted by the Chief Chemical Examiner, New Delhi, alleging bias and threats from the office. They argued that the test results were flawed and should not be accepted. The Departmental Representative countered that the test results were valid, signed by a responsible Chief Chemist, and not influenced by any alleged threats. The Tribunal held that the test results could not be discredited based on vague allegations. The appellants had the opportunity to cross-examine the Chief Chemist or get their sample tested independently but failed to do so. Thus, the test results were upheld as accurate.

2. Justification for Imposing Duty on the Entire Yarn Produced:
The appellants contended that the duty should not be imposed on the entire yarn produced (2122.100 kgs) as the actual production was only 1960 kgs, with 162.1 kgs being waste. The Tribunal agreed with the appellants, referencing a similar case (Standard Woollen Mills v. Collector of Customs, Chandigarh), and modified the duty accordingly. The duty was recalculated based on the actual production of 1960 kgs of yarn.

3. Appropriateness of the Penalty Imposed:
The appellants argued that the penalty imposed was excessive and inconsistent with penalties imposed on similar cases, such as M/s. Golden Woollen Mills. The Tribunal found merit in this argument and reduced the penalty from Rs. 10,000/- to Rs. 1,000/-.

4. Request for Retesting Samples in a Different Laboratory:
The appellants requested that the second or third sealed samples be sent to a different laboratory, specifically the Punjab Test House, Ludhiana, due to their apprehensions about the Chief Chemical Examiner's office. The Additional Collector denied this request and sent the remnant sample back to the same office for retesting. The Tribunal majority opinion held that the appellants' request for retesting in a different laboratory should have been considered to ensure fairness. However, the dissenting opinion emphasized that the jurisdictional authority should have sent the sample to another laboratory to avoid any appearance of bias.

5. Allegations of Bias and Threats from the Chief Chemical Examiner's Office:
The appellants alleged that they were threatened by the Chief Chemical Examiner's office to pay money to avoid failing the test. The Tribunal found these allegations vague and unsupported by specific evidence. The Departmental Representative argued that the Chief Chemist's credibility could not be easily challenged without concrete proof. The Tribunal majority opinion dismissed these allegations due to lack of specificity and evidence.

Final Order:
The Tribunal, in the majority opinion, upheld the chemical test results, modified the duty based on actual production, reduced the penalty, and dismissed the cross-objection. The dissenting opinion proposed remanding the case for de novo adjudication after obtaining a test report from a different laboratory. The final order was in favor of the majority opinion, disposing of the appeal and cross-objection accordingly.