2005 (3) TMI 131 - SC - Central Excise

Tribunal dismisses duty demand & penalty against respondent under Central Excise Act.

COMMISSIONER OF CENTRAL EXCISE, TRICHY Versus MADURA COATS LTD.

The Tribunal dismissed the demand for duty and penalty against the respondent for allegedly clearing goods without duty payment under Central Excise Act ... Benefit of Notification No. 26/94 read with Notification 79/94 - Clearance of goods without payment of duty - Held that:- having regard to the fact that the show cause notice was issued on the basis that the yarn in question was twisted yarn, there is no useful purpose would be served by remanding the matter back to the Departmental Authorities for considering whether the yarn in question is twisted or not - Decided against Revenue. Issues: Allegation of wrongful clearance of goods without duty payment under Central Excise Act and penalty imposition based on Notifications 26/94 and 79/94. Tribunal's acceptance of respondent's claim of no manufacture of twisted yarn post single ply production. Appellant's contention of remand for factual determination rejected by Tribunal.In the present case, the appellant had manufactured polyester/nylon/filament yarn and cotton twisted yarn between 1st March 1994 to 24th April 1994. A show cause notice was issued against the respondent for allegedly clearing goods without duty payment under Notifications 26/94 and 79/94 of the Central Excise Act. The Departmental authorities upheld the demand, leading the matter to the Tribunal. The respondent contended that no twisted yarn was manufactured after the single ply, citing precedents like Commissioner of Central Excise, Jaipur v. Banswara Syntex Ltd. and Porritts & Spencer (ASIA) Ltd. v. Collector of Central Excise, New Delhi. The Tribunal accepted this claim, prompting the appellant to argue for a remand to determine the factual basis of the respondent's assertion. However, the Tribunal, relying on the cited decisions, dismissed the demand for duty and penalty, refusing the appellant's plea for remand.The principle established in the aforementioned cases, which the Tribunal relied upon, was not contested by the appellant's counsel. The Supreme Court, considering that the show cause notice was premised on the yarn being twisted, found no merit in remanding the matter to the Departmental Authorities to ascertain the twisted nature of the yarn. Consequently, the appeal was dismissed without any costs being imposed.