Decided on May 30,1991

Nirlon Synthetic Fibres And ... Appellant
COLLECTOR OF C. EX. Respondents


N.K. Bajpai, Member (T) - (1.) THE appellants are challenging the demand of duty of Rs. 17,28,484.50 by the Assistant Collector of Central Excise on nylon filament yarn manufactured and cleared by them during the period 30 -6 -1983 to 30 -7 -1983 by denying them the benefit of concessional rate of duty under Notification 188A/62 -C.E., dated 3 November 1962. A sample of the yarn drawn on 30th June, 1983 was found to be of 219.8 deniers on test whereas exemption under notification was admissible only to nylon yarn of 210 deniers with tolerance of 4%. They have assailed the orders of the lower authorities on the ground, inter alia, that the sample drawn was not representative in character, and was not drawn from the yarn deposited in the bonded store room, but from the 'production line', that they were not informed at the time of drawing the sample the purpose for which it was taken, that the method of determining the denier of a consignment should be as per the practice laid down by the International Bureau of Standardization of Man Made Fibres, and that the tolerance of 4% permitted under the notification is in addition to the limits followed by professional bodies for the purpose of calculation of denier. It is also claimed that their own record viz., the statistical quality control data sheets in respect of 210 denier of nylon yarn for the months of June 1983 to November 1983 shows for the crucial date 30th June, 1983 their reading of denier to be 213.2 which is within the tolerance limit permitted under the notification. The certificate signed by the appellants' representative is token of drawal of sample is also being questioned on the plea that it was a printed certificate produced by the department and in no way was binding on the appellants as they were not aware that it was to be used as the basis for levy of duty.
(2.) WE have heard Shri Dushyant Dave, the learned counsel for the appellants, and Shri L.C. Chakravarti, the learned Departmental Representative. Shri Dave has handed over a copy of letter F.No. 267/20/76 CX8 dated 1 December 1977 from the Central Board of Excise and Customs addressed to the Collectors of Central Excise prescribing the revised frequency of drawal of samples of excisable commodities for test purposes. At serial No. 7 of the statement appended to this letter, the frequency of testing of samples of man made fabrics and yarn is shown to be once a month. Shri Dave's contention -sample drawn on 30 June, 1983 - the last day of the month, of June - cannot, in terms of Board's instructions, be applied to the goods manufactured in the next calendar month viz., in July, 1983. He has also relied on the judgment of the Andhra Pradesh High Court in the case of Chirala Co -operative Spinning Mills [1980 (6) ELT 174] in which it was held in para 5 that if the party had shown sufficiently that they had taken every step to produce a lesser count of yarn than the one represented by the sample taken earlier, the Central Excise officers cannot base the test result on the samples of the entire quantity of yarn manufactured during the period for levying higher rate of duty.
(3.) ON the other hand, the learned Departmental Representative has placed reliance on the judgment of the Madras High Court in the case of Ramalinga Choodambikai Mills Ltd. v. Government of India [1984 (15) ELT 407] according to which the result of chemical test is to govern production of yarn till the next drawal of the sample. He has strongly contested the claim of Shri Dave that the result of test of sample drawn on 30th June could not be applied to next one month in terms of Board's instructions dated 1 December, 1977. He has also contested the other grounds on which the orders of lower authorities have been assailed. We have carefully considered the submissions of both sides and have perused the case records. Rule 56 of the Central Excise Rules, 1944 gives the necessary authority for drawal of samples of excisable commodities for test. This rule also provides for retest of samples if a manufacturer feels aggrieved by the result of test. In this case, it is admitted that the appellants did not question the method of drawal of sample; nor did they ask for re -test as stipulated in Rule 56. Their several pleas on this score have therefore, been rightly rejected by the lower authorities. They have not shown anything to us to justify a contrary conclusion on this matter. Sample was drawn in the presence of the appellant's representative and the printed form on which the particulars of the goods to be tested are entered is accepted by them in the following words : - "APPENDIX XLVIII (See paragraph 11 -4) "One representative sample of nylon yarn of 210 denier has been drawn by the Inspector of Central Excise, Range III, Bombay 'P' Division and these have been sealed in our presence. One of the sealed sample has been given to us. We are perfectly satisfied with the manner of sampling. Dated: 30 -6 -1983 Sd/ - Sd/ - Signature of the owner or representative Signature of the Inspector of of factory Central Excise Nirlon Synthetic Fibres and Chemicals Ltd. Goregaon East, Bombay -400 063." ;

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