2000 (12) TMI 440 - AT - Central Excise

Summary

Issues:
1. Application for waiver of pre-deposit of duty amounting to Rs. 1,76,876.11.
2. Interpretation of shrinkage percentage in processing of grey fabrics.
3. Consideration of instructions issued by the Collector of Central Excise, Mumbai.
4. Tribunal's decision on remanding the issue back to the adjudicating authority.
5. Appeal for remand and fresh consideration by the adjudicating authority.

Analysis:

1. The applicant filed an application seeking waiver of pre-deposit of duty totaling Rs. 1,76,876.11. The learned Counsel argued that the applicants are involved in processing grey fabrics and that the Collector (Appeals) had granted a 2% benefit for shrinkage during processing. Reference was made to instructions issued by the Collector of Central Excise, Mumbai, indicating a higher shrinkage percentage for man-made fabrics. Additionally, reliance was placed on a Tribunal decision in a similar case where a mechanical application of a 2% percentage was deemed unsustainable, leading to a request for remand to the adjudicating authority.

2. The Collector (Appeals) determined that the appellants were entitled to a 2% shrinkage benefit for man-made fabrics. However, the applicants cited instructions from 1/94, dated 23-3-1994, acknowledging a 4% shrinkage rate for man-made fabrics. Considering these discrepancies, the balance of convenience was found in favor of the applicant, resulting in the waiver of the entire duty for the appeal hearing.

3. Upon agreement from both parties, the appeal proceeded for disposal. The Tribunal's previous order highlighted the inadequacies in mechanically applying a 2% shrinkage percentage for duty calculation. The Tribunal emphasized the importance of considering lotwise positions of shortages, nature of processing, and test results instead of uniformly applying a fixed percentage. The lower authorities were criticized for not evaluating the issue comprehensively, leading to the remand of the case for a more thorough examination.

4. Following the Tribunal's decision, the impugned order was set aside, and the matter was remanded to the adjudicating authority for a fresh determination. The adjudicating authority was instructed to consider the provided instructions and conduct a detailed assessment after granting the appellant an opportunity for a personal hearing. The appeal was ultimately disposed of through remand for further review and decision-making.