TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 248
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....sted, polywool worsted and wool silk yarns falling under sub-heading 5107.11, 5509.50 and 5107.12 respectively, for export. In the same compound, there was another unit of the same group M/s. Uniworth Textile Ltd., (hereinafter referred to as UTL), which is also a 100% EOU engaged in the manufacture of fabrics for export. The stock taking of the raw materials as well as finished goods of the first unit, UL was conducted by the jurisdictional central excise officers from 13.06.2000 to 16.06.20000 and the similar stock taking of the stock of raw materials and finished goods in respect of UTL was conducted on 17.06.2000. In course of stock taking of UL a shortage of 73.904 MTs. was found in the stock of All wool worsted Yarn. The duty involved....
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....ith interest thereon under Section 11 AB and besides this, penalty of equal amount was imposed on them under Section 11 AC. 1.3 Against this order of the Commissioner, this appeal has been filed. 2. Heard both the sides. 3. Shri A. Hidayatullah, Sr. Advocate, ld. Counsel for the appellant, pleaded that there was no shortage of any yarn in the factory of UL that the shortage of yarn found in the factory of UL almost matches with the excess quantity found in the godown of UTL that the appellant in this regard under their letter dated 5.4.2000 addressed to the Dy./Asstt. Commissioner, Central Excise, Raipur had informed that they had identified and sorted out approx. 75 MT of the moth & mildew affected finished goods (substandard quality co....
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....ad been shifted to the godown of UTL for the reasons as disclosed by the appellant to the Department under their letter dated 5.4.2000, that as regards the alleged shortage of 1.603 MTs. of wool waste involving duty of Rs. 12,564/- the wool waste being hygroscopic in nature tends to gain weight on account of absorption of moisture and this shortage may be due to wrong recording of weight and that in view of this, the impugned order is not correct. 4. Shri M. S. Negi, ld. Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner in the impugned order and pleaded that while in the Unit of UL shortage of 73.904 MTs. was in respect of All Wool worsted yarn, All wool dyed yarn, Poly wool worsted ya....
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....order, wherein, he admitted that shortage of 73.904 Mts. in the stock of yarn and shortage of 1.603 MTs. in the stock of waste in the factory of UL and that it is this statement which had been relied upon by the Commissioner. He, therefore, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions from both the sides and perused the records. 6. It is not disputed that the factory of UL and the factory of UTL, both 100% EOUs, are located in the same compound. In this appeal, we are concerned with the alleged shortage in the factory of UL which was detected in the course of stock taking done from 13.06.2000 to 16.06.2000. According to the Department, there was shortage of 73.904 MTs. in the stock of var....
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....which is adjacent to premises of UL. This letter bears the stamp of the office of the Asstt. Commissioner and the receipt of this letter as such is not disputed. It is also seen that on 16.06.2000, the statement of Shri D.K. Kothari, General Manager had been recorded under Section 14 of the Central Excise Act, 1944 and on being questioned about shortage, had stated that this yarn has been shifted to another godown, as the yarn was damaged and moth eaten and as such, it is not the shortage. We find that this statement of Shri D.K. Kothari has neither been relied upon in the show cause notice nor the appellant had been supplied a copy of the same and instead another statement dated 29.05.2001, which had been relied upon. Though in the reply t....