9911796707
TMI Blog1993 (4) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Rs. 10,000/- on the appellants vide Rule 9(2) read with Rule 173Q of the Rules. 2. With the reasons to believe that the appellants were evading Central Excise Duty by clearing cotton yarn of higher counts by misdeclaring the lower counts and paying duty lower than actually payable, a surprise visit was made at the factory premises by the Central Excise Officers on 2-7-1987. Amongst the statutory records, the officials also found some private records and on scrutiny of monthly reports in form T/4/1 to T/4/8, submitted by the factory to their Head Office in Bombay/it was revealed that the appellants had manufactured cotton yarn of higher count than the one declared. Detailed checking revealed that between 1-1-1983 to 31-5-1987 the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Frame Wrapping Register and Winding Production Register and explained what these registers would indicate. They further pleaded that the seized T/4/1 to T/4/8 reports were prepared by their Statistical Quality Control (SQC) department. Actually, as explained by the appellants, the SQC department takes samples once or twice in a month, in relation to the quality of yarn produced in running process, for internal control and based on the test, they work out average wrapping count and report to the Head Office in said form. Such testing was being done to find out ring frames which in normal course, spun finer than the normal counts. In their plea, the SQC were only required to furnish the report but they used a wrong format. Their plea was that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention and confirmed the demand in that regard. So far as the other demand was concerned, he held that the appellants had opted to pay the duty at Spindle Stage and vide Section 3 of the Act, the duty becomes payable as soon as the product comes into existence. He had held that RG 1 Register had to be maintained at that stage and after winding and packing, entry had to be made in EB 4. The adjudicating authority also referred to CEGAT decision in Supreme Woollen Mills v. Collector - 1987 (29) E.L.T. 237, where it is held that loss of grey yarn at dyeing and processing subsequent to spinning stage is not exempt from duty. He, therefore, confirmed the said demand and further imposed personal penalty on the appellant. 4. Mr. Kurkure, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the manufacture of the product has to be taken as post-manufacturing loss and not eligible for any exemption from payment of duty. 6. Considering the submissions made, and persuing the record made available, the demand for Rs. 4,93,784.45 is based on the allegation that the appellants have, during the period 1-1-1983 to 31-5-1987 manufactured yarn of finer counts, but have misdeclared that as of lower count and have paid lower duty. The demand is for differential duty. The only evidence available with the department to raise the demand, is the private record in the form of the monthly report sent to the Head Office in T/4/1 to T/4/8 forms. Besides, explaining as to how and why reports were made, the appellants have pleaded that durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t possible to uphold the demand based solely on some entries in a solitary private record, the existence and purpose as also preparation thereof, has been duly explained. The adjudicating authority has overlooked the plea of previous tests by the department and has given no finding thereon. Considering all reasons given by the ld. adjudicating authority however, it is not possible to agree with the conclusion drawn. 7. As regards the demand based on shortage, the demand is for Rs. 79,959; 70 and the period covered is from 1-1-1983 to 30-6-1987, and the show cause-cum-demand notice is issued on 31-12-1987. Practically the entire demand is beyond the period of six months, and recourse is taken to the extended period provided for by alleging ..... X X X X Extracts X X X X X X X X Extracts X X X X
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