9911796707
TMI Blog1997 (6) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as UIP) manufactures Nylon flat/POY yarn and supplies the same for texturisation to M/s. Synthetics Industries Corporation (hereinafter referred to as SIC); M/s. Kanpur Synthetics Limited (hereinafter referred to as KSL) and M/s. Prakati Synthetics Limited (PSL). The Officers of the Central Excise Department conducted audit and special checking of accounts of the companies stated above during the period from 1-11-1985 to 26-12-1985. The appellants were asked to produce detailed records and accounts of manufacture, production, storage, clearance and payment of excise duty. The appellants could not produce documents. UIP applied for permission under Rule 56B of Central Excise Rules, 1944 to remove in bond nylon filament yarn w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor will pass reasoned order and supply a copy of the order to the Petitioner the same day. 3. The permission granted was withdrawn after passing the reasoned order. The Honourable Allahabad High Court in their order dated 4-10-1985 granted interim relief as under : that the limited interim relief be granted to the petitioner till 8-10-1985 so that the petitioner may clear the POY for texturisation as was being done up to 28-2-1985 under Rule 56B of the Central Excise Rules, 1944. 4. The said order was being extended from time to time and, therefore, the parent unit UIP and the processing units continued to avail the facility under Rule 56B of the Central Excise Rules, 1944. On 26-4-1986, a party of Central Excise Officers on phys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y.C. Sarin dated 9-1-1986, the quantity which was seized and confiscated on 3-5-1986 being 1,840 Kgs., the balance material weighing 19,260 Kgs. of yarn had been clandestinely removed by the assessee as presumed or deemed by the Department. It was argued that excise was leviable on the goods produced at the time of their actual removal; that assessee had been subject to physical control during the period in question; that it was highly improper to make such wild allegations of clandestine removal of POY to the extent of 19,260 Kgs; that even the small quantity of 1840 Kgs found in the two units viz. SIC and PSL was unworkable only for a few days before the seizure; and that the said unworkable quantity of yarn would have certainly been put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Shri Y.C. Sarin. He submits that a detailed chart of Nylon flat/POY yarn along with the clearances of consequential textured yarn and wastages was prepared and submitted before the ld. Collector. He submits that the Collector instead of examining the chart, worked out the shortages etc. on the basis of the weight mentioned in the internal communication of Shri Y.C. Sarin. The ld. Counsel submitted that Nylon POY yarn was being received by the three processing units under challans; that every challan was being properly accounted for; that on the basis of detailed account maintained in respect of the POY yarn and clearances, the statement prepared clearly shows that there was a shortage of only 0.524 Kgs. The ld. Counsel submits that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there were 21.00 tons of unworkable yarn; that since he was a functionary or a responsible officer, there should be sufficient account of this yarn; that when the stocks were physically verified, there was a shortage of 19,260 Kgs; that this shortage was not accounted for by the appellants because in no records, statutory or otherwise, there was a mention of unworkable yarn; that once unworkable yarn was available, its disposal should have been accounted for which was not done by the appellants. He, therefore, submits that the lower authorities have rightly demanded duty on this yarn and imposed penalty. 7. Heard the submissions of both sides. We find that the entire case of the Department is built upon two major issues. The first issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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