TAKSHILA SPINNERS Vs. CCE CHANAIGARH

JUDGEMENT

(1.) This appeal has been filed by the appellants against the order in original dated 21.4.2000 passed by the Commissioner vide which he had confirmed the duty demand of Rs.22,44,086.79 and imposed penalty of equal amount alongwith the interest, on them.

(2.) The facts giving rise to this appeal may briefly be stated as under:

(3.) The appellants were engaged in the manufacture of woollen worsted yarn falling under Chapter 51 (sub -heading 5103.10) of the CETA. They were clearing this yarn in cones in the guise of yarn in plain (straight) reel hanks and wrongly availing benefit of Exemption Notification No.26/94 -CE dated 1.3.94 as amended by Notification No.90/94 -CE dated 25.4.94. On receipt of information, their factory premises were visited by the Preventive Staff of the Central Excise in the presence of Shri Sanjiv Aggarwal, Director of the appellants company. The staff conducted physical verification of the fully finished goods lying in the stock and the same were found in order as per balance recorded in the RG.1 Register. However, list of the various buyers to whom the woollen yarn was sold by the appellants, was taken and most of the buyers were located at Amritsar and Ludhiana. On enquiry from those buyers, it revealed that the appellants had sold them worsted woollen yarn not in plain(straight) reel hanks, but in cones as they all in their respective statements stated so. However, description in the invoices issued to the buyers given was worsted woollen yarn 'H'. The statement of Shri Sanjiv Aggarwal, Director of the appellants was also recorded on 2.6.95 wherein he admitted availment of benefit of SSI exemption during the year 1994 -95, but maintained that the woollen worsted yarn in plain (straight) reel hanks was sold and the same was chargeable to nil rate of duty in terms of Exemption Notification No.26/94 -CE dated 1.3.94. However, from the statement of the buyers and the examination of sale invoices, it revealed that during the period 25.4.94 to 31.3.95 the appellants had cleared woollen worsted XXXXXXX yarn in cones valued at Rs.2,47,63,798/ - without payment of duty of Rs.22,44,086.79. They were served with slow cause notice dated 27.1.99 vide which duty demand of Rs. 22,44,086.79 was raised by invoking the extended period of limitation and penalty was also proposed to be imposed on them. After getting their reply to that show cause notice wherein they denied the allegations and maintained that they cleared worsted woollen yarn only in plain(straight) reel hanks and not in cones and even mentioned os in their invoices at the time of sale to the buyers and as such they were not liable to pay the duty being entitled to the benefit of exemption Notification No.26/94 -CE dated 1.3.94. They also prayed for summoning of the witnesses whose statements were recorded, for cross -examination during the adjudication proceedings, but the Commissioner did not cause the presence of those witnesses and proceeded to decide the case. He through the impugned order confirmed the duty demand as mentioned in the show cause notice and also imposed penalty of equal payable with interest on them.