Customs, Excise and Gold Tribunal - Tamil Nadu
Sree Meenakshi Spinners Ltd. vs C.C.E. on 4 April, 1995
Equivalent citations: 1995(80)ELT568(TRI-CHENNAI)
ORDER V.P. Gulati, Member (T)
1. This appeal is against the order of the Collector of Central Excise (Appeals), Trichy. Under the impugned order the lower appellate authority has confirmed the duty demand of Rs. 44,499.34 in respect of the yarn which was not accounted for by the appellants and also a penalty of Rs. 10,000/- levied on the appellants by the original authority.
2. Shri Raghavan, the learned Counsel for the appellants submitted that the appellants had issued yarn in cops for being made into hanks which was cleared ultimately free of duty under exemption notification. The authorities, he pleaded, had taken note of the yarn in cops issued and the hanks cleared from the appellants' factory and also the waste produced in the process and came to the conclusion that there was shortage of 10,598.08 Kgs. of cotton yarn which had not been accounted for. Before the lower appellate authority, he pleaded, that the appellants had taken three pleas viz. (i) the weighing scale was defective (ii) the tare weight of bobins and baskets used for weighing the cops were not of uniform weight and (iii) the yarn hank manufactured in the factory was never weighed but records were kept with reference to the weight arrived through a formula with reference to the counts. He fairly conceded that in regard to the defective weighing scale and the tare weight, the appellants did not produce any substantive evidence that over a period the scale as such was defective and that tare weight as taken into consideration was not uniform. He pleaded that in the normal course, there is no uniformity in the weight of the bobins and the baskets and the weighing scales are accurate only upto a certain level. He pleaded that in any case the benefit of tolerance in the count is allowed by the departmental authorities. He pleaded that the appellants could not produce any circular in regard to tolerance accepted by the Department and he submitted that he would submit the same after the hearing. He has filed a memorandum in which he has referred to an extract from the Tariff of India (R.K. Jain) 1989-90 18th edition which is as under :
"Cotton yarn & Cellulosic spun yarn - A tolerance of (i) (+) or (-) 5% upto 40s count & (+) (-) 3% for 40s and above in respect of cotton yarn.
(ii) (+) or (-) 5% in respect of Cellulosic yarn may be allowed in the count of yarn for error in spinning sampling and testing of such yarn for the purpose of assessment of Central Excise duty.
[CBE & C letter F. No. 261/18/85-CX. 6, dated 14-5-1987 page 52.23 of the Tariff]"
No trade notice or any circular has been produced by the learned Counsel in support of his plea.
3. The learned DR for the department has pleaded that the learned lower appellate authority has passed a reasoned order and he adopted the reasoning of the learned lower appellate authority.
4. I have considered the pleas made by both the sides. It is observed that so far as the fact of shortage of yarn is concerned, the same is established based on the record of the appellants and the plea of the appellants in regard to defects in the weighing scale and also tare weight of the bobins has been considered by the lower authority and reasoned findings have been entered and no evidence as such has been produced to establish the plea of the appellants in regard to the quantum attributable to these errors. In view of this, no notice can be taken of the general plea of the appellants in regard to the defects in the weighing scale etc. However, it has been brought to our notice that some tolerance in the manufacture of cotton yarn is permitted by the authorities. This tolerance, it has to be seen is only to allow margin for the purpose of assessment of the yarn of a particular count as there is likelihood that when machines are adjusted for manufacture of a particular count of cotton yarn the production that emerges may not be exactly of the same count but may vary for a particular lot. It is not possible to believe that margin of error in yarn of a particular count produced by the appellants was such that count was always on a lower side resulting in the theoretical weight being less than the actual weight. The error in the manufacture of a particular yarn count would be averaged out over a period of time and therefore it cannot be said that the errors can be read in favour of the assessee. In view of this, I hold that there is no merit in the plea of the appellants and therefore, the appeal has to be dismissed.