1996 (12) TMI 264 - AT - Central Excise

Appeal to Appellate Tribunal - Additional ground - Yarn - Clandestine Removal - Show cause notice

Summary

Issues:
1. Excisability and dutiability of Nylon Filament Yarn.
2. Locus standi of the appellants.
3. Additional grounds of appeal under Rule 10 of the CEGAT (Procedure) Rules.
4. Allegations of clandestine clearance and duty evasion.

Excisability and dutiability of Nylon Filament Yarn:
The case involved the manufacturing of Nylon Filament Yarn by the appellants. The officers found packed yarn without entries in the RG-1 Register, leading to a show cause notice for duty evasion, confiscation, and penalties. The appellants argued that the yarn was not marketable and cited Supreme Court judgments on excisability guidelines. However, the Tribunal had previously ruled in the appellants' own case that mother yarn was excisable, rendering the arguments ineffective.

Locus standi of the appellants:
The issue of locus standi arose as the show cause notice was initially issued to a different company. The appellants claimed succession through various name changes and provided supporting documents. The Tribunal accepted the appellants' standing based on the presented evidence and relevant legal provisions.

Additional grounds of appeal under Rule 10 of the CEGAT (Procedure) Rules:
The appellants sought to raise additional grounds of appeal, challenging the jurisdiction of the show cause notice and duty payment on split yarn. The Tribunal allowed the application as the grounds raised legal points and were deemed arguable, with no opposition from the Revenue.

Allegations of clandestine clearance and duty evasion:
The show cause notice alleged clandestine clearance of 1750 cartons based on seized packing slips. The appellants argued that the slips were accounted for in the log-book and denied any clandestine activities. The Collector's decision was questioned due to lack of evidence supporting clandestine removal, leading to a reduction in penalty and setting aside the duty amount based on insufficient proof.

In conclusion, the Tribunal partially allowed the appeal, upholding the confiscation of seized yarn but reducing the penalty and setting aside the duty amount due to lack of evidence supporting clandestine clearance. The judgment emphasized the importance of proper documentation and evidence in excise duty cases.