TaxTMI 
TaxTMI 
2019 (4) TMI 1844
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....led seeking quashing of the Order-in-Original No. dated 06.08.1999 passed by the Commissioner of Central Excise, Chandigarh, where under the adjudicating authority has confirmed a demand of Rs. 2,85,35,347/- and imposed the equal amount of penalty under Rule 9(2), 173 and 220 of Central Excise Rules, 1944 read with section 11AC of the Central Excise Act, 1944. 2. The facts of the matter are that the preventive staff of the department searched the premises of M/s Priya Textiles Ltd, M/s Uma Synthetics Ltd and M/s Manika Processors situated in the same compound at Amritsar on 12.02.1998. At the time of the visit of the officers, the unit in the name of Priya Textiles Ltd was in operation and Uma Synthetics Ltd was not operational at the re....
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.... in the year 1993-94; (b) I.D. fans fitted with the boiler of M/s Manika to push in fresh air for making combustion in the boiler possible was operated with the aid of electricity; (c) Pumps fitted with boilers of M/s Uma and M/s Manika to pump in water for generation of stream were operated with the aid of electricity. 3. Thus, it has been concluded by the Department that registers showing nature, contents of the fabrics, balance sheet, letter to Income Tax authorities, letter to Department of Industries and statements of Shri Neelmani Kemka, director of the appellant conclusively proved that appellant have processed only man made fabrics. The Department has also concluded that the appellant apart from using husk/coal ....
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....e details of the date of issue of fabrics for processing and as to how much quantity has been cleared on payment of duty. Learned Advocate has taken us through the details of full description of fabrics with its composition etc. and has shown us that in majority of the cases, barring a few, the nature of fabrics which has been processed by the appellant is cotton fabric. For the purpose of convenience, the details of one of page No. 4 is reproduced below: 6. We find that the Department has heavily relied upon certain entries in column No.9 where the nature of fabrics is mentioned as polyester. However, it has failed to take note of the fact that in other entries under the same column, the nature of fabrics is mentioned as cotton fabrics ....
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....ce. It is a matter of record that the appellant has used coal /husk valued at Rs. 33,43,021/- and Rs. 32,84,809/- and Rs. 75,78,156/- respectively for the financial years 1993-1994, 1994-1995, and 1995-1996 whereas the electricity charges during the same period has been only of meager amount of Rs. 74,365/- Rs. 23,422/- and Rs. 13,900/- respectively. 7. We take note of the fact that the appellant since very beginning has been claiming that the electricity charges were only towards the electricity used by them for fans / exhaust fans. The normal expenditure on electricity for lighting purchased which cannot by any stretch of imagination be equated with the use of power generation for processing of fabrics. We also find that there is no sp....
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....d that electricity has been used by the appellant only for lighting, fans and running of exhaust fans etc which cannot be equated to use of electricity / power in the processing of fabrics. The use of steam through boiler in the process of cotton fabrics is otherwise also permissible as per the conditions in the exemption notification. We do not find that appellants have violated any of the condition of exemption notification. We also take note of the fact that there is no misdeclaration as register of "goods received and delivered‟ have specific mention of type of fabrics used in processing of such fabrics and, therefore, we find that demand of Central Excise duty is absolutely on the flimsy ground and, therefore, the order-inorigina....