9911796707
TMI Blog2004 (2) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... his led to the issuance of 2 Show Cause Notices, dated 2-7-99 and 5-7-99 by the jurisdictional Central Excise Commissioner. The notices proposed recovery of the duty short levied as well as imposition of penalties on the processor, the aforesaid 2 suppliers of fabrics and the officers or the companies. The Show Cause Notice also charged that the short levy was the result of suppression of facts by the appellant, thereby attracting the Proviso to Section 11A of the Central Excise Act for recovery of duty during the extended period. Under the adjudication order dated 4-4-2000 the Commissioner of Central Excise, Jaipur upheld the allegations. Consequentially duty demand of over Rs. 83 lakhs was confirmed and penalties were imposed on the present appellants. The appellants moved this Tribunal in appeal. Vide its Final Order Numbers 800-805/2000-A, dated 6-9-2000 [2000 (122) E.L.T. 45 (T)] this Tribunal allowed the appeals after setting aside the adjudication order. Aggrieved by that order, Revenue moved the Hon'ble Supreme Court. Vide its order dated 13th November, 2002 [2003 (156) E.L.T. A216 (S.C.)] the Apex Court was pleased to dispose of the appeals by way of remand and passed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit. The cost declarations also indicated the weight of yarn per metre of fabrics both on the warp and weft side. No objections were raised by the Central Excise authorities to the method of computation of value of the fabric or the weight of yarn taken into account for such computation and the duty payments made were accepted without any demur. 4.3 On 3-8-98 Central Excise Officers visited M/s. Sangam Processors factory and carried out certain checks. The fabrics under processing were of very different qualities, depending upon the mix of yarns in question. When weight of 50 lots were checked, it was observed that the actual weight in respect of 30 lots of fabric was equal to or less than the weight declared in the price declarations. In respect of the remaining 20 lots, actual weight was found to be more than the weight declared in the price declarations. The present proceedings have emanated from the higher weight found in respect of those 20 lots. It is the Revenue's contention that since the weight was found to be higher than the declared weight and since price of fabrics was worked out from the weight per metre of fabric, the price worked out is lower than the correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during manufacture as damaged, woven fabrics sold as stock lot without processing etc. During the adjudication proceedings the appellants submitted before the Commissioner that a variation of 9.12% was to be allowed on account of these factors. The Commissioner accepted variation on account of wastage, shortage and others to the accounting for 3.5% of yarn consumed in weaving and held that no allowance is required to be made towards yarn consumed in design and development, in the manufacture of samples and damaged fabrics as well as yarn left behind in cones. It is the appellant's contention that the decision of the Commissioner is entirely arbitrary and without factual basis. During the hearing of the case, the appellants have pointed out that weaving units carry out design and development exclusively on certain looms and since the fabrics so produced do not come to be sold, the claim for reduction made by the appellant was fully justified by the position obtaining in the industry. The appellants submit that the same is the position in respect of other items like samples, damaged fabrics and yarn left unutilized (bottom yarn). 6. During the hearing of the case, learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at by providing for the process waste of yarn." 8. The learned Counsel has also pointed out that the Textile Processors Association had confirmed to the Chief Commissioner of Central Excise, Jaipur that the above method of computation of weight of yarn was being adopted by the Textile Processing Industry as a rule. The learned Counsel for the appellants has submitted that it is well settled that the Tax authorities should go by the norm adopted in the industry while determining issues rather than going against the norms. 9. Another point emphasized during the hearing was that full facts about the method of determination of cost had been declared through cost sheets and price declarations to the Central Excise authorities, contemporaneously with the assessment of the goods. Therefore, the allegation that the relevant facts had been suppressed with intent to evade payment of duty is completely unjustified in the facts of the present case. The appellant has, therefore, contended that proviso to Section 11A justifying extended period for demand of duty was not attracted at all in the facts of the present case. 10. We have heard the learned SDR also. It is his submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly be called an effort to evade central excise duty. If the fortunes of an entire industry is to be assessed based on this formula, it is as well that excise matters are also judged by the same formula. The Commissioner was clearly in error in rejecting the formula in the appellant's case alone and in imposing duty demand on them. This is clearly discriminatory, unjust and unwarranted. 12. The Commissioner was not on terra firma in treating the total yarn consumption of fabric weavers, (who supplied the fabrics to the appellants) as revealed from their Balance sheets, as the yarn content in the fabrics processed by the appellants. Their Balance sheet quantities would be far removed from the yarn content in the fabrics supplied to the appellant processor. The need for adjustment has been recognized by the Commissioner himself and he has allowed 3.5% on account of wastage, shortage and other losses. However, he has refused adjustment towards other uses like design and development and supply of samples, damage etc. Such refusal again can only be treated as arbitrary, because it was clear from the records that a certain amount of yarn is used for such purposes and all the fabrics ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
