2001 (1) TMI 378 - AT - Central Excise

Summary

Issues:
- Duty demand on crimped yarn
- Jurisdictional validity of notices
- Applicability of tariff value for assessment
- Imposition of penalty

Duty Demand on Crimped Yarn:
The appeals were against the duty demand on crimped yarn produced by the manufacturer, penalties imposed on the manufacturer, manager, and director. The appellant contended that crimped yarn should not be classified as textured yarn under heading 54.03 of the tariff. However, technical evidence cited from Fairchild's Dictionary of Textiles and HSN Explanatory Notes clarified that crimped yarn falls under the definition of textured yarn, which includes various processes altering yarn appearance. The appellant's evidence, including a certificate and publication, did not conclusively prove crimped yarn and textured yarn were entirely distinct.

Jurisdictional Validity of Notices:
The appellant challenged the jurisdiction of notices issued by the Superintendent, citing a Board circular instructing only the Collector to issue notices for fraud allegations under Section 11A. The representative relied on Tribunal decisions supporting the circular's binding nature. The departmental representative referred to a Supreme Court judgment and additional cases to counter this argument. Ultimately, it was established that notices signed by the Superintendent lacked jurisdiction, as per the binding effect of the Board's circular.

Applicability of Tariff Value for Assessment:
Regarding the assessment, it was argued that the duty should be based on the tariff value specified in notification 32/94-C.E. rather than the higher value considered in the notice. The Tribunal agreed that the tariff value prescribed by law should be the basis for assessment, leading to a favorable decision for the appellant on this point.

Imposition of Penalty:
The appellant contended that no penalty should be imposed due to the absence of fact suppression and the legitimate possibility of differing views on classification. The departmental representative supported the Commissioner's reasoning. The Tribunal referred to a previous decision regarding the binding effect of a Board circular, concluding that the notice signed by the Superintendent, alleging factors under Section 11A, was not valid. Consequently, the appeals were allowed, and the impugned order was set aside based on these grounds.