Page 171 - ELT_3rd_1st May 2020_Vol 372_Part

2020 ] A.R. TRADING COMPANY v. COMMR. OF C. EX. (APPEALS-II), BANGALORE 393

5. Learned, AR, appearing for the department reiterated the findings of
O-I-O and O-I-A and has submitted a note, stating that it is a case involving sup-
pression of fact, misdeclaration and wrong availment of notification, unearthed
by an investigation. Sample drawn from seized goods on 9-8-2006 were tested by
chemical examiner certified the goods to be multi-filament yarn; proprietor Shri
Abdul Wajid has stated, vide statement dated 27-12-2006, that they have been
manufacturing the same item with different denierage since the factory came into
existence in 2003; he admitted to pay the duty liability; Shri. Sameer Pasha of
M/s. Horizon Trading Company, client of appellants, accepted that they are pur-
chasing polypropylene multi filament yarn and that M/s. Deccan Trading Com-
pany, Bangalore (proprietress being his mother) were also buying polypropylene
multi-filament from the appellants since 2003.
5.1 Ld. AR submits that the appellants had taken Central Excise Regis-
tration during the year 2003; were filing returns declaring the item as PPMF yarn
classifying under Chapter 5404 and claiming exemption under notification
07/2003; invoices issued also indicated PPMF yarn under Chapter Heading 5404
as monofilament yarn; benefit of notification was wrongly availed; registration
was surrendered during [March] 2005; Shri Ebenezer, in charge of Madurai unit,
stated that they are involved in the trade of PPMF yarn; they do not sell goods as
mono filament yarn; they receive the goods as PPMF yarn and accordingly sell it
as PPMF yarn only; they receive excess quantity than what is mentioned in the
stock transfer bills; excess quantity received was sold to M/s. Usha traders with-
out bills; subsequent to the investigation, the appellants took Central Excise reg-
istration on 16-10-2006 and started discharging Central Excise duty on all the
goods manufactured.
5.2. Ld. AR submits that the appellant is now disputing the test report
stating that the Customs laboratory was not equipped to test all the physical
characteristics of the yarn; Customs laboratory is equipped enough to identify
whether the subject goods are monofilament or multi-filament; during cross-
examination, Chemical Examiner expressed difficulty in finding only the twist
and tenacity of the yarns and not multi-filament characteristic of the yarn. Report
by Textiles Committee, given on 11-9-2004, states that :
“the impugned goods are monofilament fibre of average denier 4.5; average
diameter of fibre is 28.6 micron;”
The report does not mention that the sample is monofilament yarn; hence the test
report cannot be accepted; sample drawn on 9-8-2006 proves that the goods are
PP Multifilament yarn; this fact is corroborated further by the statements of S/
Shri Abdul Wajid of the appellants, of Shri Sameer Pasha, of M/s. Horizon Trad-
ing company, and of Shri Ebenezer, of the Madurai unit of the appellants.
5.3 Ld. AR. submits that the appellants contention that the test report
dated 9-8-2006 has no retrospective is not correct; the case laws cited are of no
help as assessees therein were registered with the Central Excise; in this case the
appellants have surrendered the registration in 2005. AR submits that the appel-
lants have stock transferred polypropylene multi-filament yarn to their branch
office at Madurai under stock transfer bills and without proper duty payment
invoices; further the goods had been sold to customers without bills; Goods were
sold to M/s. Usha traders on paper chits only; searches conducted at M/s. A.R
EXCISE LAW TIMES  1st May 2020  171