Customs, Excise and Gold Tribunal - Delhi
India Jute Co. Ltd. vs Collector Of Customs And Central Excise on 22 June, 1982
Equivalent citations: 1983ECR1118(TRI.-DELHI)
ORDER
1. Appeal No. 230/80 of the appellants came up for hearing on 18.5.1983 It was observed at that time that there were three separate causes of action in the form of three separate Orders-in-Original passed by the Assistant Collector in this case and as such the appellants were required to rile three separate appeals. But they had filed only one appeal. The appellants undertook to file two more appeals and prayer that the arguments which they would be advancing in respect of their appeal No. 232/80 be taken as the arguments for the other two appeals also as all the three appeals involved a common point at issue. Their request was granted. The appellants have since filed two more appeals which have been assigned Appeal Nos. 1122/80 and 1123/80-B. Since all the three appeals relate to the same appellants, arise out of a single consolidated Order-in-Appeal and involve is common point of dispute, all three have been taken up together for decision by us.
2. The facts of the three cases in brief are that the appellants cleared yarn, not elsewhere specified, falling under item 18E of the Central Excise Tariff in the form of sized beams during the period from 17.3,72 to 31.10.76 but paid duty thereon on the basis of unsized weight of the yarn. The Central Excise authorities issued them show cause notices as under calling upon them to explain as to why duty on the differential weight should not be collected from them:
(1) Show cause notice dated 24.6.75 for the period from 17.3.72 to 30.6.74.
(2) Show cause notice dated 29.5.76 for the period from 1.7.74 to 31.12.75.
(3) Show cause notice dated 29.12.76 for the period from 1.1.76 to 31.10.76.
After hearing the appellants, the Assistant Collector confirmed the demands made in the three show cause notices. The appellants appealed to the Appellate Collector but failed. Thereafter, they filed a revision application to the Central Government which on transfer to this Tribunal has been taken up as the subject Appeal No. 232/80 along with two further appeals Nos. 1122 and 1123/8U-B, as already stated above.
3. The appellants argued before us that the yarn, though cleared in sized condition, was charged for from the customers on the basis of unsized weight and that if the Department sought to collect duty on the weight of the sized yarn, the Department should also be consistent and charge duty on the basis of the count of the sized yarn. The appellants themselves, however, added that it was never the trade practice to take count of the sized yarn. They stated that in their gate passes they had mentioned the net unsized weight of the yarn in addition to the gross weight of sized yarn plus beam weight. The beam weight was separately ascertainable from their beam register. They showed gate pass No. 4694 dated 20.3.72 to prove their point that both sized as well as unsized weights were ascertainable from their gate passes. This meant that there was no suppression of facts by them and, therefore, they should be entitled lo the benefit of time-bar at least. They relied on Delhi High Court judgment in the case of J.B. Cotton Spinning & Weaving Mills (1983 ECR 117DDelhi). They also prayed that 12% interest stipulated by the Appellate Collector while granting them stay of the demands should not be collected from them because it was not the practice of the Department either to pay interest to, or charge interest from, the Central Excise assessees.
4. The Department's representative stated that the goods were assessed in these cases in the form they were presented for assessment and clearance and that this was in accordance with the Delhi High Court judgment relied on by the appellants. He added that the argument of the appellants that duty should be charged on the basis of the count of the sized yarn was a hypothetical one as the appellants had neither declared the sized count in Central Excise documents nor lodged any refund claim at any time on the ground of the rate of duty being relateable to count of sized yarn
5. We have carefully considered the matter. There is no dispute in these cases that the goods were cleared from the appellants' factory in sized form The point whether in such a situation duty should have been charged on the basis of the sized weight or unsized weight has been settled by the Hon'ble Delhi High Court in their judgment relied on by the appellants themselves. We quote the material portion from paragraph 30 of this judgment :
We clarify, if unsized yarn is cleared from the factory or a place, specified under Rule 9 or goes into the main stream of the market, then the unsized yarn would attract duty. Similarly, if sized yarn is cleared in the same way, then sized yarn would attract duty.
6. We hold, therefore, that the duty was correctly chargeable on the I basis of the sized weight of the sized yarn cleared from the appellant's factory. We agree with the Department's representative that the appellant's argument that the rate of duty applicable should be the one appropriate to the sized count is a hypothetical one. Further, the appellants themselves admitted during the hearing that it was never the trade practice to take count of the sized yarn. Count denotes fineness of the yarn. Such fineness can be determined only after removing all extraneous matter such as starch from the yarn, otherwise presence of some 30-40 per cent of sizing matter (starch) in the yarn would completely distort the test result. The appellants' argument that count should be determined without removing the sizing matter from the yarn is, therefore, illogical. There is, however, force in the appellants' argument regarding time-bar. Since sized weight as wall as unsized weight were ascertainable from their gate passes, they cannot be accused of having suppressed any facts from the Department. They are, therefore, entitled to the benefit of time-limit of one year for demands of duty short levied as applicable under Rule 10 read with Rule 173J of the Central Excise Rules, 1944 ;is applicable during the period of the demands as well as on the date of issue of the three show cause notices. We, therefore, order that the demands against the appellants shall be revised so as to cover a period of one year only preceding the date of service of the show cause notices to the appellants. We also order that the appellants shall not be called upon to by any interest on the demand amounts. The three appeals are disposed of accordingly.