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TMI Blog2016 (2) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... Plain Reel Hanks (PRH). Proceedings were initiated against the main appellant for demanding central excise duty for wrong availment of benefit of exemption notification no.8/96-CE dated 27.03.1996.The allegation is that the appellant mis-declared yarn produced by them as in the form of PR Hanks though they had manufactured and cleared the yarn in cone/cheese. They have failed to maintain the record of manufacture of excisable goods. The proceedings concluded with an order-in-original dated 1.8.2006. The Original Authority confirmed the demand and imposed equal penalty on the main appellant. Penalty was also imposed on the Director of the appellant company. Aggrieved by this order, the main appellant -company and the Director filed these ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Rule 173 B clearly stating the products manufactured by them along with applicable rate of duty as per various notifications in force from time to time. (e) As first show cause notice was issued on 17.11.2000 covering a part of the impugned period dealing with proposed confiscation of seized goods, issue of another show cause notice invoking extended period of time on 28.4.2003 is legally untenable. 3. During the arguments, ld. Counsel for the appellant reiterated the grounds of appeal. He stated that the Department proceeded against the appellant only on the basis of certain presumptions without any corroborative evidence of any mis-declared clearance of yarn in cones instead of PR Hanks. The department proceeded under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn in PR Hanks. 5. Considering the above proceedings, another proceeding vide show cause notice dated 28.4.2003 for extending period of demand, which resulted in the impugned order, is legally unsustainable. Ld. Counsel for the appellant relied on the Hon'ble Supreme Court's decision in the case of Nizam Sugar Factory reported in 2006 (197) ELT 465 (SC). 6. Ld. AR, on the other hand, reiterated the findings of the original authority and stated that the appellants did not maintain statutory records like RG-I to indicate the manufacture of various excisable goods like cotton yarn in single/double in cones/cheese and cotton yarn in PR Hanks. Their plea that they entered into the register the quantities of cotton yarn, when they were ready ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the appellant was mainly on the ground of seizure of yarn in cones/cheese, which were not entered in the RG-1 register at the time of visit of officers and non-availability of full machine capacity for manufacture of yarn in PR hanks. The explanation given by the appellant on these issues have not been examined in detail. The confirmation of demand against the appellant was made on projected to calculation to the effect that all clearances made by them were dutiable clearances in the form of yarn in cones or cheese whereas the appellant submitted evidence regarding declaration filed with the Textile Commissioner with reference to their obligation and also availability of labour and machines for making yarn in PR Hanks during the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of money, etc. The appellant have recorded production and clearance of cotton yarn in PRH form during the relevant period. The same was not given any credence by the original authority and no finding was recorded as to why such production and clearance as per RG-1/statutory records is not acceptable. Further, we find that in para 48 (ii), the Original Authority discusses regarding the requirement and operations of reeling machines. On the one side, he mentions about party's declarations to the Textile Commissioner as having 6 reeling machines. On the other side, he concludes that the availability of machine during 1998-99 cannot be based on certificates of May, 2004. No inquiry appears to have been made regarding purchase of reeling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported in 2014 (311) ELT 529 (Tribunal-Ahmd.) examined these issues and summarized the legal position to be followed in similar cases. Considering the above situation and discussion, the present demand confirmed by the Original Authority is not supported by tangible corroborated evidence and as such, cannot be sustained. 12. On the question of time bar also, we find that the appellant have made out a case against the demand. They have been filing classification list declaration under Rule 173 B mentioning the nature of the product, rate of duty and the concessional notifications claimed by them. Investigation in the case started with the search on 25.03.2000. A show cause notice to confiscate the seized goods and to demand duty on the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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