TaxTMI 
TaxTMI 
2011 (3) TMI 787
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....t M/s. Yashanand Filaments (Pvt.) Ltd., (YFPL in short) are manufacturers of "Nylon Monofilament Yarn". The nylon monofilament yarn manufactured by them have varying diameters, namely, 0.16m, 0.20mm, 0.23mm, 0.25mm, 0.28mm, 0.32mm, 0.35mm, 0.40mm, and 0.45mm. The appellant claimed that these diameters correspond to denierage of 210, 330, 420, 630, 840, 1050, 1260 and 1680. They further claimed that the nylon monofilament yarn of these deniers with a (+/-) 4% tolerance was exempt from Excise duty vide Notification No. 53/91-C.E., 4/97-C.E., 5/98-C.E., 5/99-C.E., 6/2000-C.E. and 3/2001-C.E. and accordingly they were not discharging any duty liability. The Director General of Central Excise Intelligence conducted a search on the factory premis....
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....ds in question and the said amount was adjusted against the confirmed amount of duty. The Commissioner also imposed a equivalent penalty of Rs. 38,98,234/- under Section 11AC of the Central Excise Act, 1944 and also ordered for recovery of interest under Section 11AB of the said Central Excise Act, 1944. He further imposed a penalty of Rs. 50,000/- on Shri Amit Kulkarni, Marketing Executive of YFPL under Rule 209A of the Central Excise Rules, 1944 and Rule 26 of the Central Excise Rules, 2001. The appellant is in appeal against the said order of the Commissioner of Central Excise, Aurangabad. 3. The main contentions of the appellant are as follows :- 3.1 Apart from conducting periodical audits, the Central Excise department ....
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....aking 9000 meters of the yarn and finding its actual weight in grams which will give the denierage. In the absence of such a determination and computing the denierage on formula basis, where parameters vary, cannot be correct and, accordingly, the determination of denierage undertaken by the Commissioner in the said order is not correct. 3.3 They further submit that apart from the drawing samples periodically once in 1995, another in 1998, they have been filing classification declaration at regular intervals. Vide declaration dated 1-4-96, 1-4-97, 16-11-98, 1-4-99, 1-9-2000 & 1-4-2001 under Rule 173B of the Central Excise Rules, 1944, wherein they had mentioned the fact of manufacturing nylon monofilament yarn of denierage 210, 330,....
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.... 5. We have considered the rival submissions very carefully. 6. In this case, the show-cause notice has been issued on 10-4-2002 demanding duty for the clearances effected during the period from 1-4-97 to 15-10-2001. The fact that the assessee was manufacturing nylon monofilament yarn of specified denierages and was also claiming exemption on said products was known to the department right from 1995 onwards. The department had also drawn samples of the products manufactured by the assessee, first on 11-10-95 and second on 13-10-98. The purpose of drawal of these samples, as could be seen from the corresponding memo/panchnama, was for testing the denierages of the nylon monofilament yarn to decide on the eligibility for the exc....
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.... even in respect of diameter 0.45mm the benefit of doubt should be given to the assessee and there is no reason why the benefit should be denied in the absence of actual measurement of denierage or determination of specific gravity by the department rather than arriving at the denierage on the basis of formula. Thus, only in the case of diameters of 0.25mm, 0.30mm and 0.35mm the department's case that the yarn produced is not within the denierage prescribed in the notification with a (+/-) 4% tolerance limit can sustain. This demand also will sustain only for the period falling within the normal time-limit of one year i.e., starting from 1-4-2001 to 15-10-2001. From the records it is seen that the appellant had maintained their production a....