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TMI Blog2004 (7) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... through the process of spinning, dyeing of spun yarn which is then processed into garments; that since all these facilities were not available with them, they had sent fibres outside the factory for spinning into yarn to job workers through the brokers; that these brokers sometimes do not reveal the correct identity of the job workers and keep it a business secret and misguide the supplier of the goods; that yarn was received from job workers through brokers; that the Commissioner, under the impugned Order, has confirmed the demand of Central Excise duty and imposed penalty holding that they had manufactured yarn out of imported fibre in their factory as the job workers, whom the fibres were claimed to have been sent to, were found to be fictitious and non-existent and cleared the same for home consumption without payment of duty. The learned Advocate, further, submitted that the inference drawn by the Commissioner is totally incorrect and baseless; that assuming that they have manufactured the entire disputed quantity of yarn in their own factory, no duty can be demanded from them in view of the clinching evidence that the entire quantity of yarn was either exported as such or was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of export products, no excise duty is payable on the finished product or on the intermediate product; that no evidence has been adduced by the Department to establish that he was knowing or had reason to believe that the goods in question were liable to confiscation. 4.1 Countering the arguments, Shri Vikas Kumar, learned SDR, submitted that on a specific information, the factory premises of the Appellants No. 1 was searched on 11-7-2000 and several records were resumed; that the scrutiny of the records revealed that they were sending acrylic fibres for spinning into acrylic yarn on job work basis as per the letters addressed to the job workers; that on verification of job work done by the spinning units, it was found that none of the 16 units except one M/s. Durga Spinning Mills, Ludhiana, was registered with the Department and none had paid any Central Excise duty on acrylic yarn manufactured by them on job work basis for the Appellants; that summons issued to all the 16 job workers were received back undelivered from the postal authorities with remarks such as "whereabout of the firm could not be located", "not known", "without plot No.", "No firm in the Plot No.", "incomple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts had not questioned the correctness of the statements recorded by the Department as they never asked for cross-examination of the person who had deposed that they had never done the job work for them. 5. The learned SDR also contended that there is no truth in Appellants' plea that they did not have enough installed capacity to manufacture the impugned quantity of yarn; that no evidence has been produced to prove that the spindles in their factory said to have been sold to M/s. Kay & Kay Knitwear were installed at another premises; that the Challans to show clearance of used machinery did not indicate any value/price of the old machinery nor the purpose against for/under which these were issued to M/s. Kay & Kay Knitwear; that Shri Nayar had admitted to have shifted 800 spindles from their unit at Ludhiana to their unit at Village Sahni; that thus there is a contradiction inasmuch either 1200 spindles were sent to Kay & Kay Knitwear or 800 spindles were sent to their other unit. He also submitted that the Appellants have contended that there is positive evidence that whole of the yarn was used in the manufacture of goods exported out of country and was exempt from duty under No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered the submissions of both the sides. The contention of the Appellants is that they import acrylic fibres without payment of duty against the Advance Licences and export knitted garments manufactured out of so imported fibre and that they have produced evidence in support such as DEEC Books, Shipping Bills, etc. On the other hand the Adjudicating Authority has confirmed the demand of Central Excise duty on yarn on the ground that the job workers whom the fibre was supposed to have been sent to by the Appellants for conversion into yarn were found to be fictitious and thus they have themselves manufactured the yarn and removed the same for home consumption clandestinely without payment of Central Excise duty leviable thereon. The investigation conducted by the Revenue, it appears from the records, remained confined to the stage of non-existence of the job workers only. Once the Revenue found that the job workers are fictitious, the charge has been levelled against them and confirmed in the impugned Order that they had themselves converted fibre into yarn and cleared it without payment of duty. No material/evidence has been brought on record to even indicate as to whether any inve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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