TaxTMI 
TaxTMI 
2019 (4) TMI 724
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....of Nylon Monofilaments of different gauges falling under Chapter hearing 5404.10 of Central Excise Tariff Act, 1985. The appellant's factory was visited by the Central Excise officers on 5.11.1998 and on the reasonable belief that the provisions of Central Excise Act and Rules had been violated, a quantity of 2393.20 kgs of finished goods found in the factory premises were seized. Later, on completion of investigation, alleging that the appellant though manufactured Nylon monofilament of different diameters but were clearing the same in the guise of Nylon monofilaments yarn without payment of duty by claiming exemption Notification No. 5/98-CE dated 2.6.1998, two show-cause notices were issued, the first one dated 3.5.1999 proposing confisc....
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....rage of the nylon monofilaments yarn is based on the exact weight of the goods manufactured by the appellant i.e. the goods on which the test is conducted and not on any theoretical formula. In contrast, the method adopted by the learned Commissioner is by way of backward calculation i.e. Weight = Volume x Specific Gravity. Thus, while taking the specific gravity of Nylon monofilament yarn, the department has wrongly considered the specific gravity of its raw material viz. Nylon 6-chips. Therefore, the basis to arrive at the specific gravity of nylon monofilament yarn itself is erroneous and the weight of the product consumed in the whole calculation process goes wrong, hence, the reading would not give correct denierage of the nylon monofi....
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..... Further, he has submitted that the samples drawn from the lot were 'representative', hence applicable to entire lot. Hence, the finding in respect of the goods that the exemption is inapplicable is incorrect. In support, the learned Advocate placed reliance on the judgment of this Tribunal in the case of San International Vs. Commissioner of Customs, New Delhi - 2016 (337) ELT 93 (Tri-Del). 4. Further, the learned Advocate has submitted that even though specific submissions were made before the learned Commissioner, on the aspect of limitation, through their reply dated 17.1.2000, no finding has been recorded by them. He submits that they had filed classification declaration of all products manufactured which were dutiable as well as e....
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....ific denierage. The formula for calculation of the denierage has been given in the Tariff and it has been established that the appellants were not measuring the actual denierage and they were only calculating the diameter and thereafter further applied the formula to arrive at the denierage for the diameter. On being questioned by the department, they failed to provide the formula by which the denierage was calculated by them. There is no necessity to be an expert for using the formula when the diameter of gauges of yarn are known and not disputed. Therefore, as per the tariff formula, the products are not eligible for the exemption notification having denierage more than that prescribed in the said notification. Further, he has submitted t....
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....e second issue regarding eligibility of benefit of exemption notification no. 5/98-CE , the matter was remanded to the adjudicating authority observing as follows: - "11. We are therefore satisfied that benefit of the exemption would be available to the monofilament in question and therefore we have not considered the argument on limitation. We note however that the Commissioner has not dealt with the other ground in the notice, that monofilament was not of the denier specified in the entries of the table to the notification. We think it appropriate that a finding should be given on this aspect. For this purpose, therefore, the matter is remanded to the Commissioner for adjudication in accordance with law." 8. Therefore, the limited q....
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....ssioner has not applied the test result for the clearance from 16.8.1998 to 5.11.1998 for which different formula was applied by him in calculating the denierage of the product. Assailing the said approach of the learned Commissioner, it has been submitted by the appellant that for the said period i.e 16.8.1998 to 5.11.1998, neither samples were drawn nor any test had been conducted. Therefore, the confirmation of demand denying the benefit of exemption notification 5/98-CE is incorrect. 9. Without going into the merit of the formula, we are of the view that when samples were tested by the Department, and the result indicated that the denierage declared by the appellant in clearing the goods more or less in confirmity with the test repor....