1997 (4) TMI 178 - AT - Central Excise

Summary

Issues: Stay appeal regarding the denier of Synthetic Filament Yarn exceeding the prescribed limit under Notification No. 31/93, violation of principles of natural justice, applicability of test report, differentiation between textured and non-textured yarn, necessity of cross-examination, interpretation of Chapter note 2 of Chapter 54, financial hardship plea, compliance deadline.

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the appellant, engaged in manufacturing Synthetic Filament Yarn, filed a stay appeal challenging an order-in-appeal passed by the Commissioner, Central Excise, Gaziabad. The appellant contended that the denier of the yarn in question exceeded the prescribed limit under Notification No. 31/93, which allowed a tolerance limit of 4 per cent. A sample of textured yarn was tested twice, showing differing denier values. The appellant raised concerns about the observance of natural justice, as the testing method prescribed in Chapter note 2 of Chapter 54 was not confirmed to have been followed, and their request for cross-examination of the Chemical examiner was denied due to the discrepancy in test reports.

The appellant argued that the test report should only apply to the quantity of textured yarn from which the sample was drawn, citing precedents where cross-examination was deemed necessary when the case relied solely on a test report. The appellant also highlighted the distinction between textured and non-textured yarn under the relevant notification, emphasizing that the denier limit applied to both types without differentiation. The Department opposed the appellant's plea, asserting that both test reports indicated the denier exceeded the prescribed limit, justifying the denial of cross-examination.

The Tribunal analyzed the submissions and identified the main issue as whether the yarn's denier was within the prescribed limit of 210 denier with a 4 per cent tolerance. Despite the appellant not pleading financial hardship and solely relying on merits, the Tribunal found in favor of the Department, rejecting the stay request. The Tribunal granted eight weeks for the appellant to deposit the disputed amount, setting a compliance deadline of 5th May, 1997, failing which the appeal would be dismissed without further notice. The Tribunal emphasized that a detailed examination of the case would occur during the main appeal hearing, indicating that the case was prima facie in favor of the Department.