9911796707
TMI Blog2018 (3) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... ment that:- i. Appellants had indulged un- accounted purchase of cotton ii. They had indulged in unaccounted manufacture of cotton yarn iii. Excess stock of cotton yarn was found in search of the premises on 5.3.2004 iv. The appellant cleared cotton to job work units without cover of invoices / job work challans without accounting. v. Cotton yarn was sent for further processing without cover of central excise documents. The appellant received sale proceeds in cash in respect of unaccounted clearances for cotton yarn. vi. Department took the view that appellants had contravened the following provisions of Central Excise Act, 1944 and the Rules made thereunder:- i. Rule 4 and 8 of Central Excise Rules, 2001 &2002 inasmuch as they manufactured and removed excisable goods viz. Cotton yarn payment of duty; ii. Rule 6 of Central Excise Rules, 2001 &2002 inasmuch as they manufactured and removed excisable goods viz. Cotton yarn without assessing the duty payable on such goods; iii. Rule 10 of Central Excise Rules, 2001 & 2002 inasmuch as they did not properly account the actual quantity of goods manufactured and removed in the Daily stock account; iv. Rule 11 of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l excise duty of such excisable goods vests on the said job worker. However, the adjudicating authority held that as the appellant had supplied cotton cone yarn to manufacture a like quantity of cotton hank yarn at the premises of the job workers, without cover of central excise documents, appellant had effected payment of duty on the cotton cone yarn sent by them to their job workers. Accordingly, based on these grounds, the adjudicating authority confirmed duty liability on unaccounted clearance of cotton cone yarn by appellant for the year 2002 03 to Rs. 9,79,987/- and Rs. 11,62,543/- for the period 2003 04. The adjudicating authority also confirmed duty liability of Rs. 3,37,037/-proposed in Annexure E2 of the show cause notice in respect of shortage of cotton yarn of various counts found by the officers. In fact, the adjudicating authority confirmed reduced duty liability of Rs. 24,79,477/-. Penalty of Rs. 19,79,477/- was imposed under section 11AC on M/s.Radha Textiles. Penalties under Rule 26 of Central Excise Rule were also imposed on the co-noticees as below:- i. Super Textiles Rs. 50,000/-, appellant in Appeal No.E/510/2007 ii. SNB Textiles Rs. 25,000/-, appellant in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the reliance of computer print outs made in respect of alleged differential duty liability, for the period 2003 04, ld. counsel draws our attention to para 227 to 231 of the appeal filed, which is part of the reply to the show cause notice made by them, wherein the defense in respect of reliance on computer print outs has been brought out. As contended therein, the conditions prescribed in section 36B of the Central Excise Act, 1944 was not specified in respect of the data retrieved from the floppies and relied upon in the show cause notice. Hence the demand for 2003 04, which relies on these data retrieved from the floppies cannot be admitted as evidence as per the said section 36B of the Act. (to explain in respect of duty confirmed by Order-in-Original for the year 2003 04 by adding reliance on computer print outs). 3.7 With respect of demand of duty liability on shortage of cotton yarn of various counts found in the premises on 7.1.2004, ld. counsel submitted that the said shortage is covered with job worker challans and invoices issued by them for conversion of cone yarn into hank yarn. 3.8 As regards 1060 kgs. of cotton yarn seized from appellant on 5.3.2004, ld. counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rs. 30,09,040/- was proposed for the year 2003 04 as evidenced from the Annexure E5 of the show cause notice. 6.1 However, we find that the adjudicating authority has chosen not to demand any duty liability on such clearances of hank yarn but instead has ordered demand of duty in respect of cone yarn clearances by the appellant. The reasoning of the adjudicating authority as brought out in paras 103 and 104 of the adjudication order are reproduced for ready reference:- "103. In this case, the duty is demanded on the basis of clearance of cotton hank yarn by RTPL, the year 2002-03 and 2003-04. During the above period, RTPL did not have any infrastructure in their factory for doubling and reeling of cotton cone yarn. From the documents, it is seen that the cotton hank yarn for which duty is demanded for the year 2002-03 was manufactured at Super Textiles, Pudukottai, Universal Yarn, Dindigul, SNB Textiles, Dindigul and Sri Kumar Textiles, Madurai on account of RTPL. It is also proved that RTPL have received the unaccounted quantity of 1,49,031/- kg or cotton hank yarn from their job workers and cleared it without accountal. In such cases, when the raw materials are received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s supplied by them to their job workers for the purpose of doubling and reeling. The actual price of 100% cotton single yarn in cones prevailing during the year 2002-03 as recorded in the invoices of RTPL is taken as the Cum-duty price to arrive at the total value of clearance. The total duty payable on the above unaccounted clearances of cotton cone yarn by RTPL during the year 2002-03 works out to Rs. 9,79,987/- (BED : Rs. 8,52,163/- AED : Rs. 1,27,824/-)" 6.2 We are unable to fathom these findings of the adjudicating authority. The adjudicating authority cannot obviously go beyond the parameters of the demand proposals made in the show cause notice. This is the law that has been laid down in plethora of decisions. 6.3 Thus, on this very aspect, we are of the opinion that the impugned order cannot sustain. 6.4 Interestingly, as seen from para 104 reproduced above, the adjudicating authority is conscious that the show cause notice concerns only cotton hank yarn. Nonetheless, he ploughs ahead with his conclusions as below:- "Even when it is conclusively proved in the Show-Cause-Notice that RTPL have received back the cotton hank yarn and cleared the same without accounting and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial economic zone) who gets yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60 or readymade garments falling under Chapter 61 or 62 of First Schedule to the Tariff Act, produced or manufactured on his account, on job work (herein after referred to as '"the said person") shall obtain registration, maintain accounts, pay duty leviable on such goods and comply with all the relevant provisions of these rules, as if he is an assessee: Provided that the job worker may, at his option, agree to obtain registration, maintain accounts, pay the duty leviable on such goods, prepare the invoice and comply with the other provisions of these rules. In such a case the provisions of these rules shall not apply to the said person. The job worker, may, at his option, authorize the said person to, on his behalf as his agent, maintain accounts, pay duty, prepare invoice and comply with any of the provisions of these rule except that of rule 9: Provided further that the job worker may make an option to undertake the activities mentioned in this sub-rule as an agent or person authorized by the said person and in such a case, the said job worker shall be deemed to be the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore succeeds in respect of these demands. (ii) In Appeal No. E/509/2007 filed in respect of duty of Rs. 3,37,037/- on the goods found short on 7.1.2004, we find from Annexure E2 of the show cause notice that the shortage was spread out in respect of not only hank yarn but also cone yarn and that too of different types and counts. The contention of the appellant that these goods were covered by invoices / job worker challans does not cut any ice. This being so, we uphold the confirmation of duty liability on the shortage of 24,121 kg. yarn amounting to Rs. 3,37,037/-. The appeal filed by M/s. Radha Textiles is rejected to this extent (iii) Coming to the penalties imposed, we find that the penalty of Rs. 19,79,477/- has been imposed under section 11AC of the Act on M/s.Radha Textiles against the total demand of duty of Rs. 24,79,477/-. As we have already held that the amounts of Rs. 9,79,987/- and Rs. 11,62,453/- are not sustainable and only a demand of Rs. 3,37,037/- is upheld, the penalty imposed under section 11 AC is modified to Rs. 3,37,037/-. So ordered. (iv) With respect of penalties imposed on others, since the acts and omissions alleged against those persons p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
