TaxTMI 
TaxTMI 
2004 (8) TMI 107
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....eal are as follows : A show cause notice dated 28/29-10-1985 was issued to the respondent alleging short payment of duty on account of non-disclosure of 126.66 MTs. of production of Polyster Filament Yarn (in short 'POY') in the RG-I register and removal without payment of duty thereon. The short payment was stated to be Rs. 1,06,07,775/-. Similarly, another allegation related to removal of 5.65 MTs. of POY without payment of Rs. 4,75,187.50/-. Though there were several charges only two of them namely charge Nos. (iv) and (v) relating to the aforesaid allegations were confirmed. The Collector confirmed the demand of duty of Rs. 1,06,07,775/- raised in para (iv) of the impugned show cause notice. He also confirmed the demand of duty....
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....Collector confirmed the duty to the extent of Rs. 2,99,406.25/-. The Collector held that tubes of 1 Kg. and less were taken to the finishing room though there was no denial of the fact that there is a market for tubes of one kg. and less. But the assessee took the stand that it did not market any such tube keeping in view its reputation and market credibility. They were removed as waste. The Collector found that according to the directions given on 22-11-1983, the assessee was required to maintain separate records for the different kinds of waste and the log sheets indicated that the bobbins of the yarn were not waste, as claimed. 5.Order of the Collector was challenged before the CEGAT. The primary stand of the assessee before the CEGAT....
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....it was sold as yarn. There was definite indication in the show cause notice about the intention to evade duty. The Tribunal did not notice that in order to show what was being taken out was waste, separate register was required to be maintained in terms of a direction given on 22-11-1983, but that was not done. In the classification list which was filed, there was no mention of the size of the alleged waste. Allegation was misdeclaration so far as yarn is concerned, and not of waste as was observed by the CEGAT. It has been specifically observed by the Collector that there can be yarn even up to the weight of 50 gms., and when the issue related to one kg., prima facie the product was yarn. For removal and destruction of waste, particular pr....
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....to evade duty, prima facie do not appear to be correct. The material being wound on tubes was yarn. It did not cease to be yarn because it broke off before the required weight was achieved. It only became waste if it got entangled or messed up or if the tubes of less weight were cut. It was for the assessee to show categorically that this had happened. The log sheets deal with tubes. But without question the weight shown in the log sheets is of yarn. This prima facie indicates that tubes having yarn of less than 1 kg. are also being logged. Thus the Collector was right that the log sheets show presence of yarn on tubes, even of 1 kg. or less. The Collector had specifically noted that, if the assessee had destroyed the tubes of 1 kg. or less....