TaxTMI 
TaxTMI 
2016 (10) TMI 608
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....oner of Central Excise, Chandigarh. The main appeal is by the assesse operating 100% EOU engaged in the manufacture of cotton yarn and blended yarn. The other three appeals are by the officers of the main appellant against personal penalty imposed on them. All these appeals are taken up together for disposal. 2. The appellants were clearing some of their manufactured yarn in the domestic market for which they are liable to duty in terms of Section 3 of central Excise Act, 1944. During the relevant time the appellant were availing concessional rate of duty for such clearances in terms of notification 8/97-CE date 01/3/97. The condition for exemption is that the goods should have been cleared from raw materials produced or manufactured in ....
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....ted raw materials. As such, their eligibility for concessional rate of duty under Notification 8/97-CE was sought to be disallowed. In in impugned order the Original Authority confirmed the demand of Rs. 5,59,93,309/- he appropriated an amount of Rs. 3,31,81,418/- already paid by the appellant. He dropped the demand of Rs. 3,01,33,502/- in view of recalculation of duty demand based on submissions made by the appellant. He also imposed penalties on the main appellant and three officers of the main appellant. 3. We have heard both the sides elaborately and considered the appeal papers. The eligibility of the main appellant of the concessional rate of duty under Notification 8/97-CE is the point in dispute. The fulfillment of condition, as ....
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....voices issued indicating such lot number show the composition of yarn. We note that the entire accounting process is computerized. The lot number is the main linking reference to all documentation and I can be established by all the linked documents the nature and composition of yarn of a particular lot number. The log register maintained by the main appellant contains the details of said lot, start date, finished date, mixing, share, quality, blend etc. We find the elaborate computerized documentation maintained by the assesse during the relevant time has not been examined in correct prospective by the Adjudicating authority before confirming the demand. 4. We also note that the Commissioner ordered for verification of the documents mai....
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....e computerized documentation is for all types of transaction including sales invoices, purchases which in involving third parties and, hence, the suspicion that the documents could not be established to be real time documents is without basis. On perusal of the documents submitted by the appellant we find that based on the lot number the appellants have made out a categorical case that there is no use of imported raw material in the goods cleared to the domestic market. There is on evidence except for entries in DYGR which has been refuted with categorical evidence of records maintained by the appellants. We find no merit in the findings of the Original Authority to support the demand. We also note though the initial check was made by offic....
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.... recorded that the evidences gathered by the Department pointed towards suspected diversion of the imported fiber for domestic use and further recorded from the circumstantial evidences regarding mentioned of 'Brazalian' in the DYGR report. He further relied on two E-mail communications to arrive at his finding. The learned Counsel for the appellant strongly contested the reliance placed on these two E-mails. He explained that with reference to one E-mail, invoice dated 10/02/03 has been prepared. Such invoice is linked to a particular lot which, the records will show, is made out of 100% H-4 CT cotton which is a domestic cotton. Regarding second E-mail dated 15/02/03 no clearance were made to Arvind mills due to incomplete negotiations. It....