Page 172 - ELT_3rd_1st May 2020_Vol 372_Part

394 EXCISE LAW TIMES [ Vol. 372

.Trading Company, Madurai - revealed that the goods in stock were in excess of
the goods accounted for in the stock transfer documents; clandestine clearance of
goods was further corroborated from the searches conducted at Usha Trading
Company, Madurai and the statement of Shri Vijayan, proprietor. Shri Ebenezer,
in charge of Madurai unit, stated that they were involved in the trade of PPMF
yarn; they do not sell goods as mono filament yarn; he accepted the receipt of
excess quantity than mentioned in stock transfer bills and such excess quantity
was sold to M/s. Usha traders without bills. He submits that the fact of suppres-
sion by the appellant was proved beyond doubt during investigation; hence, the
plea of limitation of demand does not sustain.
6. Heard both sides and perused the records of the case. Brief issues
that requires to be considered in this case are as to whether the synthetic filament
yarn manufactured by the appellant falls under 5402 of CETA as contended by
the department or under 5404 as contended by the appellants and as to whether
the test result would be applicable prospectively or retrospectively. The appel-
lants are small scale unit and are engaged in the manufacture of synthetic fila-
ment yarn of 600d and above and have classified the same under 5404 of CETA,
1985. The Superintendent in-charge of the appellant got the item tested by the
Textile Committee who vide report dated 6-8-2004 concluded that the impugned
goods were polypropylene monofilament yarn of 600 d or more and of which, no
cross-section dimension exceeds 1 mm. On the basis of this letter, the appellant
surrendered their Central Excise registration and submitted a letter to the de-
partment on 15-3-2005 stating that no duty was payable on the impugned goods
in terms of Notification No. 7/2003-C.E., dated 1-3-2003. After an investigation
conducted by DGCEI, the samples were got tested by Chemical Examiner who
reported that the impugned goods were blacked coloured multi-filament yarn;
composed of polypropylene and denier was 610.4 without tolerance. On the basis
of this report, the Department contended that the impugned goods fall under
5402 of CETA 1985 and therefore, are not eligible for the exemption contained in
Notification Nos. 7/2003-C.E. and No. 30/2004-C.E. during the relevant period.
Accordingly, the present proceedings have been initiated.
6.1 For a proper appreciation of the nuances of the classification, it is
desirable to have a look at the classification of relevant goods under Chapter 54
of CETA, 1985. The relevant heading for 5402 as well as 5404 till 2004-05 were as
follows (till 2004-05) :

Heading Sub- Description of goods Rate of duty
No. heading Basic Additional
No.
(1) (2) (3) (4) (5)
54.02 Synthetic filament yarn (other than
sewing thread), including synthetic
monofilament of less than 60 deniers
5402.10 High tenacity yarn of nylon or other 16%
polyamides
5402.20 High tenacity yarn of polyesters 16%
Textured yarn
5402.31 Of nylon or other polyamides 16%
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