Tribunal allows appeal on yarn count dispute, citing lack of evidence for suppression.

The Tribunal partially allowed the appeal against the Collector of Central Excise's order regarding yarn count discrepancy. The appellant's argument that there was no suppression of facts was accepted. The Tribunal found no evidence of intentional manipulation or deliberate concealment by the appellants. Relying on a Supreme Court ruling requiring positive evidence for an extended limitation period, the demand was limited to six months from the show cause notice date, and the penalty was revoked. The appeal succeeded due to the lack of proof supporting the allegation of suppression.

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Issues:
1. Appeal against the order of the Collector of Central Excise, Combatore regarding the count discrepancy in yarn samples.
2. Allegation of suppression by the authorities leading to a demand for a longer period.
3. Dispute over the imposition of penalty based on the alleged suppression of facts.

Analysis:
1. The appeal was filed against the order of the Collector of Central Excise, Combatore, concerning the discrepancy in the count of yarn samples. The samples initially declared as 35's count were found to be 37.5's count upon testing. The Chemical Examiner's report confirming this was received on 21-7-1987, following which a show cause notice was issued on 29-12-1987 demanding a total duty of Rs. 40,788 for the period in question.

2. The appellant's representative argued that the Department was aware of the count difference since 21-7-1987, and the delayed issuance of the show cause notice beyond six months was unjustified. They contended that there was no suppression on their part as they had been paying duty based on their own laboratory tests and had no intention to deceive. The appellant offered to pay duty for six months from the notice date.

3. The Revenue's representative stated that the higher count yarn was manufactured and not disputed by the appellants. They argued that since there was no plea regarding the count falling within the permitted tolerance limit, the question of limitation did not apply. The delay in the test result did not bar the demand for duty.

4. The appellant cited a relevant case to support their argument against suppression, emphasizing the need for deliberate concealment for deception. The Tribunal noted that there was no evidence of intentional manipulation by the appellants to show a lower count. The absence of proof that the appellants were aware of the count discrepancy or deliberately withheld information led to the conclusion that no suppression of facts was established.

5. Following the Supreme Court's ruling on the necessity of positive evidence for invoking an extended limitation period, the Tribunal held that no suppression was proven in this case. As a result, the demand was restricted to six months from the date of the show cause notice, and the penalty was set aside. The appeal was partially allowed based on the lack of evidence supporting the allegation of suppression.

This comprehensive analysis of the judgment highlights the key arguments, legal principles, and the Tribunal's decision regarding the count discrepancy in the yarn samples and the alleged suppression of facts.

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