1994 (11) TMI 271 - AT - Central Excise

Summary

Issues: Appeal against order of Collector of Central Excise, Jaipur regarding mis-declaration of fibre composition in seized yarn, demand for duty, denial of re-testing, imposition of redemption fine and penalty, invocation of extended period, and application of penal provision.

Analysis:
1. The appeal was filed against the order of the Collector of Central Excise, Jaipur, regarding the mis-declaration of fibre composition in seized yarn. Central Excise Officers seized 555 gunny bags of yarn and conducted tests on samples, finding discrepancies in the composition declared by the appellant at the time of clearance from the factory. The demand for duty was revised based on the test results, leading to a confirmed duty amount, redemption fine, and penalty imposed on the appellant.

2. The appellants challenged the order, highlighting issues such as denial of re-testing, time-barred demand, and invocation of the extended period. The appellant's argument focused on the reliability of the departmental tests, discrepancies in the test results, and the denial of natural justice due to the refusal to retest one sample. The respondent supported the Collector's findings, emphasizing the misdeclaration by the appellants and the application of penal provisions.

3. Upon examination of the case record and submissions, it was noted that out of 81 samples tested, discrepancies were found in only 6 samples regarding the declared fibre composition. The denial of retesting for one sample was considered a denial of natural justice. The appellants' assertion that the demand was time-barred and the misdeclaration was not proven beyond the report of the Chemical Examiner was also taken into account.

4. The Tribunal found merit in the appellant's contentions, especially regarding the denial of retesting for one sample and the misdeclaration in a limited number of samples. The Collector's failure to provide reasons for not retesting the 10th sample was deemed unjust. The composition of specific lots, like MD-2/325, was analyzed, leading to a reconsideration of the demand for duty based on test results.

5. The Tribunal set aside the Collector's order, remanding the matter for further consideration. The redemption fine was deemed unsustainable without the confiscation of goods, but the invocation of the extended period due to misdeclaration was upheld. The penal provision was found applicable, and a de novo consideration was ordered, granting the appellants a benefit of doubt and a personal hearing.

6. Ultimately, the appeal was allowed by way of remand, directing the adjudicating authority to reevaluate the case in line with the Tribunal's findings, granting the appellants a fair opportunity to present their case and addressing the issues raised regarding the misdeclaration of fibre composition and the imposition of fines and penalties.