2003 (4) TMI 415

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....ufacture polyester staple (P.S.) fibre and send the same to job workers for conversion into spun yarn under the provisions of Rule 57F. When they sent the P.S. fibre to job worker under sub-rule (4) of Rule 57F, they debited 10% of the value of the goods under sub-rule (6) and when they received the spun yarn made out of the P.S. fibre, from the job worker, they took re-credit of the amount under sub-rule (7). This was the modus operandi of the appellants insofar as the manufacture of polyester yarn was concerned. During the period Jan. to July 1997, they had sent out certain quantities of P.S. fibre, under challans, to their job workers. The spun yarns manufactured by the job workers from such quantities of P.S. fibre were received back in....

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..... He also reduced the quantum of penalty to Rs. 50,000/-. The present appeal is against the order of the lower appellate authority. 2. It appears from the record that the credit of Rs. 3,68,042/- has been denied to the appellants on the ground that the entire quantity of P.S. fibre dispatched by them under sub-rule (6) to their job worker, M/s. Santogen Spinning Mills, Silvassa had not been received back as spun yarn in the appellant's factory under sub-rule (7). It further appears that the appellants took the stand that the difference in quantity was the waste generated in the conversion of P.S. fibre to spun yarn in the job worker's factory and the same was cleared by the latter on payment of duty. According to the appellants, where....

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....appellant's burden to substantiate that the waste had been cleared on payment of duty by the job worker. Only when this was substantiated were the appellants entitled to take credit of the full amount debited. In this connection, ld. DR has referred to the format of the challan which was required to be used for the dispatch of goods under Rule 57F. He has particularly referred to Column No. 4 of Part-II of the format, which, in a case where waste was not returned by the job worker to the principal manufacturer but cleared on payment of duty, required the job worker to furnish particulars of the invoice under which the waste was cleared on payment of duty as well as the quantum of duty paid on the waste. Ld. DR has submitted that, in the ins....