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of <h1>Tribunal upholds fines for inventory discrepancies in cotton yarn factory. Compliance and control responsibilities emphasized.</h1> <h3>GANGA NAGAR SEHAKARI SPINNING MILLS LTD. Versus COLLR. OF C. EX., JAIPUR</h3> GANGA NAGAR SEHAKARI SPINNING MILLS LTD. Versus COLLR. OF C. EX., JAIPUR - 1998 (98) E.L.T. 223 (Tribunal) Issues:- Discrepancies in cotton yarn inventory- Alleged violations of Central Excise provisions- Responsibility of management in maintaining control- Request for adjustment of inventory- Hygroscopic nature of yarn as explanation- Enquiry reports from Co-operative department- Adjudication by Collector (Appeals)- Reduction of fine and penaltyAnalysis:The case involves discrepancies in cotton yarn inventory found during a visit by Central Excise officers to the appellant's factory. The officers noted shortages and excesses of yarn, leading to the issuance of a show cause notice. The appellant argued that the discrepancies were due to factors like worker manipulation, weighment errors, and the hygroscopic nature of cotton yarn. They also claimed that being a cooperative sector unit, no malpractice could be attributed to them. Additionally, the appellant requested an adjustment of certain yarn quantities based on the show cause notice's description.The Tribunal observed that the department's case was based on physical verification where stocks and accounts did not tally, indicating violations of Central Excise provisions. The appellant's admission of potential manipulation and wrong weighment highlighted the management's responsibility to ensure proper control and compliance. The Tribunal emphasized that adjustments could only be made within the same type or variety of items. Despite the appellant's explanations regarding worker manipulation and yarn characteristics, the substantial discrepancies in inventory were deemed unsatisfactorily explained.Regarding the enquiry reports from the Co-operative department, the Tribunal noted serious irregularities in production and clearance records. However, the absence of a final report and approval raised doubts about the report's conclusiveness. The Tribunal upheld the Collector (Appeals) decision that had already shown leniency by reducing fines and setting aside penalties. Consequently, the Tribunal confirmed the impugned order and rejected the appeal, indicating that the appellant had failed to maintain proper stock and accounts, leading to violations of Central Excise provisions.
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