1995 (10) TMI 105 - AT - Central Excise

Issues Involved:
1. Confiscation of seized goods.
2. Duty demand on processed fabrics.
3. Imposition of penalty.
4. Use of baby boiler and electric motor for processing.
5. Applicability of exemption under Notification No. 137/77-C.E.
6. Delay in adjudication.

Issue-wise Detailed Analysis:

1. Confiscation of Seized Goods:
The impugned order confirmed the confiscation of seized goods valued at Rs. 22,478.50 under Rule 173Q of the Central Excise Rules, 1944. Since the goods were released to the party under a B-11 Bond and a Bank Guarantee of Rs. 10,000/-, Rs. 5,000/- was appropriated from the bank guarantee in lieu of confiscation.

2. Duty Demand on Processed Fabrics:
The duty demand of Rs. 7,93,325.43 and Rs. 47,078.83 was confirmed for processed cotton fabrics and processed man-made fabrics cleared under Rule 9(2) of the Central Excise Rules, 1944. The Tribunal had earlier directed a re-computation of duty if hosiery fabrics, exempt under Notification No. 70/69-C.E., were excluded. The Collector dismissed this plea, stating the assessee did not provide modified clearance figures.

3. Imposition of Penalty:
A penalty of Rs. 5,000/- was imposed under Rule 173Q of the Central Excise Rules, 1944.

4. Use of Baby Boiler and Electric Motor for Processing:
The Tribunal had remanded the matter for verification of whether the baby boiler was used to feed steam to the jiggers. The assessee contended that the baby boiler was used for sizing cotton crepe fabrics and not for feeding steam to jiggers. They argued that the bleaching machine was used as a washing machine, with the electric motor attached solely for cleaning the rollers. The Collector relied on statements from the assessee's family members, which the Tribunal found inconclusive without further verification. The Tribunal noted that the department failed to verify the use of electricity from the local electricity board records.

5. Applicability of Exemption under Notification No. 137/77-C.E.:
The assessee claimed exemption under Notification No. 137/77-C.E., which grants exemption if processes are not carried out with the aid of power. The Collector rejected this claim, stating that the processes of bleaching and dyeing were carried out with the aid of power. The Tribunal found that the department did not sufficiently investigate this claim, failing to verify the use of electricity and not considering invoices and affidavits provided by the assessee.

6. Delay in Adjudication:
The Tribunal noted significant delays in the adjudication process, with the matter being remanded twice and taking over ten years. The Tribunal emphasized that the remand orders' directions were not followed, and the department did not conduct necessary verifications. The Tribunal cited several judgments supporting the setting aside of orders due to long and delayed adjudication.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal. It held that the department failed to prove the charges, and the assessee's evidence merited consideration. The Tribunal emphasized the importance of timely and thorough adjudication, criticizing the department's failure to follow remand directions and conduct necessary investigations.

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