Customs, Excise and Gold Tribunal - Mumbai
M/S. Arvind Mills Ltd. B.R. Shah And ... vs Commissioner Of Central Excise, ... on 19 June, 2001
ORDER
G.N. Srinivasan, Member(J)
1. Application No.E/Stay-622/01 has been filed by the assessee for waiver of duty of Rs.2.3 crores approximately and penalty of Rs.2.60 crores an redemption fine of Rs.20 lakhs. As far as the other appellants are concerned, applications have been filed for waiver of Rs.5 lakhs on appellant in Appeal No. E/718/01 and of Rs.13 lakhs on the appellant in Appeal NO.E/717/01.
2.The assessee appellant is having a composite cotton textile mills and manufactures cotton yarn mainly for captive consumption. Prior to 1st April, 1994 the yarn which was manufactured by the assessee, was captively consumed and was subjected to duty at specific rate and thereafter duty was levied at ad valorem. Since there was no sale of yarn from the factory, its sale price was not available. The appellant adopted costing method for calculating assessable value. The appellant was manufacturing yarn and thereafter dyed for further processing. It is the case of the appellant that they have been paying duty on yarn manufactured by it at spindle stage. This fact has been mentioned in certain communications made by the assessee to the department (pages 152 & 154 of the paper book). Show cause notice dated 3.4.1999 was issued claiming inter alia that the assessee failed to include all the expenses as per requirements of costing norms in the tool cost of the production as required by law and it also charged the assessee that the form of yarn in which ti was cleared for weaving was the yarn on which process of dying winding warping and sizing etc. have been undertaken after spindle stage of yarn. It was also changed in the show cause notice that the assessee had incurred cost of operations done after its spindle stage such as dyeing winding warping sizing etc. which were required to be included in the assessable value of the captively consumed yarn which the assessee has failed in this case. Replies were filed and impugned order has been passed denying the same. Hence the three appeals.
3. Learned counsel for the assessee argues before us that the process of manufacture was known to the department that is revealed in the flow chart (page 131). It is also stated that in their letters at pages 152 and 154 it has been specifically stated that the assessee was paying the duty at spindle stage. In their price list at page 111 it has been specifically stated that the cost includes wages, stores, repairs, utilities, factory over-head and depreciation. It is specifically urged before us that there cannot be any suppression in the case and invocation of the larger period of limitation is wrong in law. Learned counsel therefore attacks the finding of the adjudicating authority made in pages 25 and 26 of the order. He also took us through the financial hardship, stressing the point that for the year ending 2000 the assessee has incurred a loss of about Rs. 315 crores. He however concede that in respect of wages and bonus to the tune of Rs.2 lakhs he has no objection to pay the same. As against this, learned DR took us through the various correspondence and the findings of the adjudicating authority.
4. We have considered the rival submissions. We are considering the waiver applications. We cannot state that with a mathematical precision that the assessee has a very strong case on merits as well as on limitation. This is only a prima facie view. Considering the financial hardship we have to take a pragmatic view. When we mentioned these two points to learned DR he could not say anything against the same. However we take note of the fact that the appellant has offered to pay Rs.2 lakhs out of the demand of duty of Rs. 2.60 crores approximately. We direct the appellant to pay the same within one month on receipt of the order and on such payment being made, there will be wavier of payment of remaining sum of duty as well as penalty on all the appellants. Compliance on 9th August, 2001.(Dictated in Court)