Page 168 - ELT_3rd_1st May 2020_Vol 372_Part

390 EXCISE LAW TIMES [ Vol. 372

Central Excise duty of Rs. 21,68,365. A Show Cause Notice No. 89/06-07, dated 5-
2-2007, was issued; the same was confirmed by Order-in-Original No. 7/2007,
dated 30-8-2007. Goods seized at Bangalore and Madurai, totally valued at Rs. 4,
97,711, were confiscated while option to redeem the goods on payment of a fine
of Rs. 30,000; Central Excise duty of Rs. 21,68,365 was confirmed along with in-
terest and equal penalty under Section 11AC of CEA, 1944; penalty of Rs.
1,00,000 was imposed under Rule 25 of the CER, 2002. The Appellant Company
has pre-deposited an amount of Rs. 6 Lakhs. On an appeal filed by the appel-
lants, Commissioner (Appeals), vide O-I-A No. 44/2008-CE, dated 28-2-2008,
rejected the said Appeal, for not depositing balance 4 Lakhs, under Section 35F of
the CEA, 1944. On an appeal filed, by the Appellants, the Tribunal allowed the
appeal by way of remand, vide Final Order No. 742/08, dated 1-7-2008/8-7-2008,
granting waiver of pre-deposit of the balance amount. Commissioner (Appeals)
passed the impugned O-I-A No. 58/2009-C.E., 8-6-2009.
2. Shri B.V. Kumar, Learned Counsel, appearing for the appellants
submits, on the issue of classification of impugned goods, whether under CSH
5402 of CETA, 1985 (as claimed by the Department) or under CSH 5404.10 (as
claimed by the Appellants), that the Appellants manufactured Polypropylene
Monofilament Yarn, having a denierage ranging between 400 to 2000, which are
classifiable under CSH 5404.10 of the CETA, 1985; hence, they have correctly
availed the benefit of Notification No. 7/2003-C.E., dated 1-3-2003. Samples were
drawn and sent by the Superintendent of Central Excise, Sunkadakatte Range,
Bangalore, vide Letter Bearing No. ‘Test Memo OC No. 395/04’, dated 6-6-2004.
Textile Committee, vide their Test Report No. TC/LM/Y-26, dated 11-9-2004,
stated that :
“the yarn colour is black and is in the form of spools of 600 Denier; the av-
erage deniers of Monofilament fibre is 4.5; average diameter of fibre (Mi-
cron) is 28.6; yarn is 100% Polypropylene and that diameter of fibre does
not exceed 1 mm.”
On the basis of the said Test Report dated 11-9-2004, the Appellants surrendered
the Central Excise Registration, vide letter dated 15-3-2005, as no duty was paya-
ble on the impugned goods, in terms of Notification No. 7/2003 C.E., dated 1-3-
2003; Till that date they were regularly filing Quarterly ER 3 Returns. The DGCEI
drew samples on 9-8-2006 and sent the same to the Chemical Examiner, Custom
House, Chennai. Vide Test Report No. S/29/12/06, dated 21-9-2006; CRCL stat-
ed that :
“the Sample is in the form of black coloured multifilament yarn. It is com-
posed of Polypropylene. Denier without tolerance = 610.4.”
2.1 Learned Counsel submits that during the cross-examination con-
ducted on 2-7-2007, Chemical Examiner admitted that the Chemical Analysis was
conducted by the Chemical Assistant, Mr. J. Mohan Kumar under his supervi-
sion; Customs House Laboratory is not equipped to test all the parameters for
yarns especially physical parameters such as twist of the yarn, tenacity of the
yarn etc.; Customs House Laboratory is not equipped to test synthetic filament
yarns like the Textile Committee of the Government of India or SASMIRA (Bom-
bay), ATIRA (Ahmedabad); initial test that was carried out on the sample was
‘Visual’ to determine whether it is monofilament yarn or multi-filament yarn;
Denier was determined as 610.4; only two tests, as above, were conducted and
that the twist of the yarn was not determined since the laboratory is not
EXCISE LAW TIMES  1st May 2020  168