PREMIER MILLS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal arises from Order -in -Original No. 22/90, dated 25 -9 -1990 by which the Addl. Collector of Central Excise has confirmed the duty demand of Rs. 68,312.52 in terms of Rule 9(2) of Central Excise Rules, read with proviso to Section 11A of Central Excise Act, 1944.

(2.) APPELLANTS are manufacturers of man -made fibres falling under Chapter sub -heading 5409.00. They had filed price list w.e.f. 10 -3 -1988 which had been approved and they were clearing the goods, in the course of manufacture defective fabrics was coming out as fents and rags which they were clearing under the price list filed by them. On investigation, it was found that they had deliberately cut sound fabrics of continuous length into pieces of length of 70 cms and 80 cms in order to market them as 'blouse pieces' and therefore show cause notice was issued alleging suppression of facts and raising demands of differential) duty on 75,285.66 Sq. M of fents cleared during the period 1 -3 -1988 to 27 -2 -1989 by denying exemption Notification No. 6/88, dated 19 -1 -1988 to an extent of Rs. 68,312.52. Appellants had earlier cleared these items by availing the Notification No. 6/88, dated 19 -1 -1988.

(3.) APPELLANTS had contended that they had not cleared sound fabrics by deliberately cutting the same as cut pieces of lengths of 70 cms and 80 cms. They had contended that fents had arisen out of manufacture as defective ones and in order to substantiate this plea, they had relied upon the inspection cards to indicate that the goods in question are bona fide fents by virtue of the fact that they were indicated as defective as per the relevant inspection cards. They had stated that after the fents had arisen, they had only trimmed the same to uniform length which did not change the nature of the fents and such trimming for marketability purpose does not amount to cutting of the good cloth into cut pieces of uniform length and the benefit of notification cannot be denied.