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TMI Blog2018 (5) TMI 1668X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasonable to assume that there was some inaccuracy in recording by the assessee with some stock being shown as issued for processing and not actually being put in the process resulting in excess stock in one stage and a shortage in the other - demand on this count dropped. Goods found in excess in the vehicle - vehicle was intercepted by the officers based on the information they received and the documents they recovered with the distributors - Held that:- While the Commissioner had questioned the evidence provided by the department and examined it minutely, the vague and baseless statement by the respondent that 5 metres sarees should be taken as 4.2 metres only so that their figures match was accepted by the Commissioner without any basis whatsoever. Therefore, find that the duty of ₹ 3,995/- is payable on this excess goods found in the truck and this along with recovery of duty, confiscation and redemption fine thereon be imposed. The quantity of excess fabric cleared without payment of duty is also liable to be confiscated. As find a redemption fine of ₹ 5,000/- is reasonable for the purpose. Confiscation of excess goods found in the factory premises - Held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner to adjudicate the matter, after following the principles of natural justice. Thereafter, the Commissioner of Customs Central Excise, Hyderabad-III vide Order-in-Original No. 31/2005-Commr. Dated 30.11.2005 passed denovo adjudication order, dropping the entire proceedings. This appeal is filed by the Revenue seeking to set aside the order passed by Commissioner and uphold all the allegations made in the show cause notice. However, appeal has been filed with only one respondent i.e. M/s Devidutt Textiles Limited and no appeals against the remaining 5 noticees were filed. This fact was confirmed by Ld. DR as well as Ld. Counsel of the Respondent during the hearing. 3. Heard both sides and perused the records. The appeal is only against M/s Devidutt Textiles Limited. I confine myself to the Order-in-Original in so far as it relates to them. 4. Based on the intelligence that the Respondents, who are manufacturers of man made fabrics are evading duty, searches were conducted by Central Excise Officers at their factory premises as well as the premises of two of their Distributors M/s Rahul Textiles and M/s Ashish Textiles and a few residential premises of the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to prove that the goods were manufactured. During the personal hearing in the denovo adjudication proceedings before the Commissioner, the respondent argued that each fabric got folded twice, once in the grey stage and again after processing; whenever any fabric was found defective it was returned and after reprocessing it was folded again and the contractor was paid twice once for at the grey stage and again after processing (and if necessary again when the cloth was returned). Therefore, the private documents seized from the labour contractor and his statement alone do not prove that there was excess production and clandestine removal. The labour contractor was cross examined during the denovo proceedings during which he explained that his rate was 6 paise per metre of cloth of 84 cm width and 8 paise per metre of cloth of 112 cm width. To a specific question as to how much he gets as total charges from grey stage to finished goods, he confirmed that he gets 12 paise per metre for 84 cm and 16 paise for 112 cm for fabric for checking at two stages together. He also confirmed that the statement as above made by the Director of respondent is true. The Ld. Commissioner dropped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch stocks by the distributors, confiscation of the fabrics and imposition of penalty thereof were dropped by Ld. Commissioner in the Order-in-Original (denovo) and it was not appealed against by the department and has therefore reached finality. Once the charge that the fabric was cleared without payment of duty to the distributors and held by them is dropped, the demand of duty on the factory for the same fabrics does not sustain. As far as goods reportedly found short in the factory [(c) in para 4 above] are concerned, the respondent had submitted before the Commissioner, that in the cloth of 112 cm width, 7410 metres of grey fabric was found in excess as it was shown to have been issued for production but it was not put in the process. As a result, the corresponding shortage of 7294.65 metres of 112 cms fabric in the textiles and process stage can be seen from the show cause notice. Similarly, of the 84 cms width fabric, 37,389 metres of grey fabric is shown as excess fabric lying in factory as it was recorded as issued but it is not yet processed, therefore there is a shortage of 19342.7 metres of 84 cms width fabric of the textiles in process and a shortage of 1720.50 metres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he grey fabric and the fabric in process are reckoned together. The correspondence figures for 84 cms width are s follows: Grey fabric (+) 37389 metres In process (-) 19343.70 Finished goods (-) 1720.40 Net excess 16325.90 Thus, I find there was no shortage in the aggregate of 84 cm width fabric also. 9) I, therefore, find that the demand on goods found short at the factory premises amounting to ₹ 75353/- is liable to be dropped. 10) Goods found in excess in the vehicle No: AP 9T 8688 [(d) and (e) in para 4 above] and this vehicle was intercepted by the officers based on the information they received and the documents they recovered with the distributors and the Officers took stock of the fabric in the truck and found there was an excess of 1175 metres of sarees in the truck over and above what was documented. These goods are valued at ₹ 19,975/-. The respondent, in their prayer before the Commissioner, argued that sarees which were supposed to be of uniform length of 5 metres will actually measure only 4.2 metres to 4.3 metres and therefore there was an excess of 1174 metres when th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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