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TMI Blog2004 (2) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2.6 lacs. He has given an option to the appellant to redeem the confiscated goods on payment of fine of Rs. 5 lakhs. 2. The appellant is a processor of fabrics. They do not weave fabrics themselves. They purchase fabric from other weavers and carry out various processes on the fabrics. Some of the processes are excisable while some others are not. The dispute is about fabrics processed over a long period of time spanning December 1993 to August 1996 and January 1998. Show cause notice alleging the evasion of duty was issued on 14-7-98 and the case was adjudicated on 23-3-2001. 3. The dispute raised is about the processes carried out on PV shirting. The order has also held that the appellant had misdeclared the fabric as cotton fabric falling under Heading No. 52, while it was man-made fabric classifiable under Heading No. 54. The appellant had cleared the processed fabrics partly after payment of duty and partly without payment of duty, on the ground that processes like padding, calendering and singeing carried out on dyed fabrics were nor liable to duty, while other processes like Stentering attracted duty. In the present order, the Commissioner has held that all the PV Shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or re-processing. The report states that in respect of the other entries there is variation in the process as shown in the production slip and corresponding entries in the processing register. 5. During the hearing, learned Counsel for the appellant has submitted that the present verification has shown that the purported random verification carried out during the investigation was grossly erroneous and allegations have been made in the show cause notice and findings reached in adjudication without due regard to the records themselves. The Counsel submitted that of the 53 entries now it is clear that in 33 of them, goods had been either cleared on payment of duty, or sent for reprocessing, (where no duty is involved) or related to exempt goods, or nave been entered as dutiable goods. With regard to the variations in the entries in production slips and processing register, it is the explanation of the learned Counsel that such variation also could not be taken as evidence of stentering having been carried out. The learned Counsel has submitted that detailed accounts are kept lot wise of the consignments received. Form IV register (raw material account) and processing register keeps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als and were not ready for entry in the finished goods record. They have submitted that, as is to be seen from the seizure memo itself, the fabrics were in lumps. They were required to be straightened, folded and packed before making entry in the RG-I register. It is the learned Counsel s submission that seizing and confiscation of such in-process material was entirely unwarranted. He has also pointed out that no allegation of clandestine processing could be raised against these consignments, inasmuch as each of these lots found mention in the raw material (Form-IV) and other accounts. Consequently, they could not be removed clandestinely. The Counsel also pointed out that it is well settled that such goods do not attract any penal proceeding [1989 (44) E.L.T. 233 - Raja Textile Ltd. v. CCE and 1979 (4) E.L.T. (J402)]. 8. The learned Counsel appearing for the appellant has also submitted that there is no basis to the charge of misdeclaration of the fabric as cotton fabrics. The fabrics in question were made from cotton seed and that was the reason for treating them as cotton. He has relied on the Fair Child s Dictionary in support of this submission. He also pointed out that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o entries related to goods entered in RG-1 as dutiable. Thus, the contention that these consignments were clandestinely cleared without payment of duty came to be raised only because of careless verification during investigation and refusal to consider the factual position pointed out by the assessee during adjudication. Majority of the entries have been incorrectly taken. With regard remaining entries also, the allegation is only supported by entries in the processing register. We have been taken through these entries during hearing. Most of the entries themselves are not clear. Only notation ,, has been made in the register. No entry of stentering has been made. A few entries have also been made by over-writing. The appellants explanation is that the correct position about these entries is to be ascertained from other connected records too. The processing register classified lots under D or F heading and when co-relation is made with these and other entries it would be evident that these consignments were also of exempted goods. We are of the opinion that the assessee s explanation merits acceptance. The processing carried out by the appellant fell into two categories, one ..... X X X X Extracts X X X X X X X X Extracts X X X X
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