2003 (9) TMI 653

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.... and cleared chenille yarn without payment of duty. A penalty of equal amount was also imposed on the appellants. 2. The brief facts of the case are that on 16-2-99, the unit of the appellants was visited by the Revenue Officers and it was found that there were 65 machines used in the manufacture of chenille yarn. The chenille yarn was liable to excise duty and the appellants are clearing chenille yarn without payment of duty. On 17-2-99, the statement of Shri Rajeev Kumar, proprietor of the firm was recorded who admitted the fact regarding manufacture of chenille yarn and also admitted that they were manufacturing chenille yarn for the last 5-6 years and clearing the same without payment of duty. The Revenue Officers also made enqu....

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....in their factory and most of the cotton yarn in the factory was damaged. In this respect, the appellants made insurance claim and the survey report of the insurance company only shows that the presence of doubling machines. The contention of the appellants is that if they were manufacturing chenille yarn during that period, there must be some mention of the machines used for the manufacture of such yarn in the survey report of the insurance company. 5. The contention of the appellants is also that the demand quantified on the basis of their total clearance of yarn. The appellants produced the evidence on record to show that they were also trading in cotton yarn which is not liable to excise duty. Therefore, the quantification of dem....