Customs, Excise and Gold Tribunal - Delhi
Youngman Hosiery Factory vs C.C.E. on 1 July, 1998
Equivalent citations: 1999(112)ELT114(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Briefly stated the facts of this case are as follows : -
In the course of visit of Central Excise Preventive staff to the appellants factory on 7-3-1989, they found excess stock of fully finished fabric over and above the recorded balance in R.G. I. The excess quantity of grey man-made knitted pile fabric was found to be measuring 6126.40 square metres. A statement was also recorded. On the basis of the aforesaid detection of the case and further investigations a show cause notice was issued.
In reply to the show cause notice the appellants herein submitted that the processes of polishing and shearing the fabric undertaken by the appellants on grey fabrics do not amount to manufacture of any new commodity. Grey fabric remains grey fabric despite those processes. In support of the said submission the appellants also relied on Supreme Court's judgment in the case of Mafatlal Fine Spg. and Mfg. Co. Ltd. 1989 (40) E.L.T. 218 (S.C.). In effect therefore the appellants claimed the benefit of Notification 297/79. The Additional Collector however, adjudicated the case, ignoring the aforesaid submissions of the appellants. We observe that the adjudicating authority has merely gone on the assumption that the appellants are undertaking dutiable processes on the grey fabric and therefore they are required to pay duty. He confiscated the seized goods, allowed the option to the appellants to redeem them on payment of fine in lieu of confiscation and also imposed a penalty. He also demanded duty.
2. We have also heard the ld. SDR, Shri A.K. Agarwal for the Revenue. We are of the view that the adjudicating authority in having ignored the main submission of the appellants that they are not undertaking any dutiable process on the grey fabric and are therefore not liable to duty, principles of natural justice have been grossly violated. Consequently, the matter is fit for remand. Hence, we set aside the impugned order and allow the appeal by remand and direct the Addl. Collector to re-adjudicate the case taking into account the aforesaid plea of the appellants. Needless to observe that in deciding the case de novo the principles of natural justice will be duly observed by the adjudicating authority.