1997 (12) TMI 287 - AT - Central Excise

Summary

Issues:
1. Demand for duty on blended yarn composition.
2. Allegation of clearing consignment without payment of duty.
3. Imposition of penalty for incorrect entry in RG 1 register.

Analysis:
1. The first issue pertains to the demand for duty on blended yarn composition. The Collector demanded duty on a consignment of blended yarn containing wool and viscose, arguing that since viscose predominated, it should be classified as viscose yarn subject to duty. The appellant contested this, citing a previous test at Baroda showing a higher wool content. The Collector's reliance on the Amritsar test was deemed unsustainable due to the absence of an erroneous test claim and the tolerance factor not being applicable in this context. The Tribunal found in favor of the appellant, ruling the demand for duty on this ground as not sustainable.

2. The second issue involves the allegation of clearing a consignment without payment of duty. The appellant was accused of clearing trinoble terylene viscose yarn to a sister concern without duty payment based on packing slips found in their factory. The Collector's conclusion was based on matching counts and weights of yarn. However, the Tribunal found discrepancies in the basis for the conclusion, highlighting the lack of evidence linking the specific lots to the alleged clearance. The Tribunal also noted unaccounted quantities and lack of evidence supporting clandestine removal. Consequently, the Tribunal rejected the contention of clearing goods without duty payment.

3. The final issue concerns the imposition of a penalty for incorrect entry in the RG 1 register. The penalty was imposed due to finished goods being incorrectly entered in the register. The appellant argued that the entry was made in the wrong column due to potential packing changes. However, the Tribunal ruled that since the goods were accounted for in the total finished goods quantity, the penalty was unwarranted. Therefore, the Tribunal allowed the appeal, setting aside the impugned order and directing consequential relief to follow.