Customs, Excise and Gold Tribunal - Tamil Nadu
Sree Nithyakalyani Textiles Ltd. vs Commissioner Of C. Ex. on 11 March, 2005
Equivalent citations: 2005(184)ELT398(TRI-CHENNAI)
ORDER T.K. Jayaraman, Member (T)
1. The issue is the same in both the appeals. Hence they are taken up together for issue of a common order.
2. Smt. R. Bhagya Devi appeared on behalf of the Revenue and Ms. Jayashree Venkataraman appeared on behalf of the respondents. The appellants manufacture Cotton Yarn, Polyester Yarn and Polyester Cotton Blended Yarn falling under various Chapters of the Central Excise Tariff Act, 1985. Revenue noticed that the process loss in respect of Polyester Fibre is rather high in respect of the appellants. While South India Textiles Research Association (SITRA) opines that loss should be of the order of 2 to 3%, the actual loss is to the order of 6.3% in the case of appellants. The appellants availed Modvat credit in respect of the Polyester Fibres. Revenue proceeded against the appellants and demanded duty on the input (in Polyester Fibre), which is not accounted, penalties were also imposed. In appeal, the Commissioner (Appeals) allowed loss up to 1%. The appellants have come before this Tribunal for setting aside the order of the Commissioner (Appeal). There is no allegation of clandestine production and removal. When poor quality fibre is used, the wastage is more. The contention of the appellant is that depending on the quality of the fibre the waste percentage could go up. It was also urged that no credit can be denied for the reason that the input is contained waste even if the waste is exempted (Rule 57D).
3. I have gone through the records of the case carefully. It is a fact that Revenue does not have any evidence that the abnormal loss is on account of clandestine production and removal of finished products. In these circumstances, no duty can be demanded alleging that the process loss of Polyester Fibre is very high. In the absence of an experiment to determine the abnormal losses in such cases, the order of the Commissioner (Appeals) is not sustainable. Hence I allow the appeals with consequential reliefs.