COMMISSIONER OF CENTRAL EXCISE Vs. MONITEX DYE PRINTS

JUDGEMENT

(1.) This Appeal challenges the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dated 27th April, 2004 [: 2004 (170) E.L.T. 165 (Tri.-Del.)]. By that order, the Respondent/Assessee's Appeal No. E/3086/2002-NB(A) has been allowed by the Tribunal. That Appeal challenged the order passed by the Commissioner of Central Excise (Appeals) dated 17th April, 2002.

(2.) Ms. Suchitra Kamble appearing for the Revenue, in support of this Appeal, submits that the substantial question of law is required to be answered in favour of the Revenue and against the Assessee. She submits that the Respondent is liable to pay Central Excise duty at ad valorem basis on the textile goods, namely, 6,47,801.45 lacs meters, which have been declared "loose" in RG-1 register (finished goods register) as on 16th December, 1998 at the time of removal of goods. She submits that if the register was of finished goods, there was no occasion for the Assessee to have entered this stock as "loose". The explanation given to the authorities was therefore in the nature of after thought. Once having noted this stock in this register, then, the same would have attracted the ad valorem duty in terms of the changed effect to Section 3A of the Central Excise Act, 1944.

(3.) She submits that if the Appellant is engaged in manufacture of excisable goods and by way of introduction of Compounded Levy Scheme on specific textile fabric as per the Notification dated 10th December, 1998, then, the Assessee is covered under Hot Air Stenter Independent Processors Annual Capacity Determination Rules, 1998 with effect from 16th December, 1998. Thus, the loose quantity of fabrics produced or manufactured prior to this date will be covered under the ad valorem duty scheme. She invited our attention to the entries which have been made in the stock register and compiled as an Annexure to this paper book. She further submits that the show cause notice specifically made these allegations and, when the matter was before the adjudicating authority, he found that in view of the change in the duty structure and applicable to the fabrics processed on or before 16th December, 1998, the stock position of finished goods, which have been held at about midnight on 15th December, 1998, has been verified and confirmed by the staff deployed for the purpose to de-marking clear stock attracting duty at old rate. Ms. Kamble submits that there is a finding of fact recorded by both, by the adjudicating authority as well as the first appellate authority that the details concerning the issue have been verified. The RG-1 register is to be maintained by every manufacturer unless exempted. Once the stock is reflected in the statutory records, which only deals with accounting of finished goods, then, any finding of fact rendered by the Tribunal to the contrary is perverse. She relies upon this finding of fact rendered in the order of the adjudicating authority namely, the Deputy Commissioner of Central Excise, Gorega on Division, Mumbai, at internal pages 3 and 4, running pages 26 and 29 of the paper book. She submits that these findings have been confirmed by the appellate authority, namely, the Commissioner of Central Excise (Appeals), Mumbai-5. Therefore, they should not have been disturbed by the Tribunal and the Tribunal's reasoning in that behalf in para 3 of the impugned order is entirely erroneous. It is vitiated by an error of law apparent on the face of the record. Therefore, the impugned order deserves to be quashed and set aside.