ORDER
Shiben K. Dhar, Member (T)
1. This appeal is directed against the Order-in-original No. 38/88, dated 13-10-1988 passed by the Collector of Central Excise, Aurangahad.
2. It was alleged that the appellants Wrapping Registers indicated yarn of higher counts than what was declared to the department and on which duty was paid.
3. Arguing for the appellants, the learned Counsel submits that the Wrapping Register only indicates the average counts of yarn which comes from different ring frames. It is a record maintained by the Mills only for quality control purposes and cannot be considered an authenticated record to indicate counts of the yarn. When they find yarn of higher counts coming out, they immediately take corrective measures so that yarn confirms to the count which is intended to be sold. During the relevant period, in fact, the count of yarn was tested by the Deputy Chief Chemist and there was not a single case in which there was any variation. It only indicates that the yarn was sold actually confirming to the declared count. The count of yarn also depends on condition of humidity and in their factory, ideal conditions do not prevail. Moreover, the Collector ought to have given tolerance as per Board’s orders dated 14-5-1987. He has committed an error of law in holding that since the period involved was anterior to this date, Board’s earlier instructions prescribing tolerance had to be taken into account. He submits that their bona fides would be evident by the fact that not in a single case, there was any variation between the counts declared and as found by the Deputy Chief Chemist.
4. Arguing for the department the learned DR, Shri Satnam Singh submits that the earlier instructions relating to tolerance only could be adopted. In any case the counts exceed the declared count even while giving 5% tolerance. To the extent, correct counts have not been declared and appellants themselves admit that they had manufactured, in regard to 34 and 35 counts, yarn of slightly higher count, extended period was sustainable.
5. We have heard both the sides. Our attention was drawn at the outset, to the Tribunal’s order in the case of M. Prabhavati Sahakari Soot Girni Ltd. v. Collector of Customs and Central Excise (Order No. 969/89-WRB) [1990 (48) E.L.T. 522 (T)]. In that case, the demand was issued on the ground that entry made in the Wrapping register did not conform, in regard to count, with the declaration. The Tribunal however, held that entries made in private records could not be relied upon in the absence of corroborative evidence. They also held that during the relevant period, there was not a single variation in the test results in regard to counts. On this ground, the Tribunal allowed the appeal.
6. Ordinarily, therefore, one has to hold that entries made in a private register cannot be relied upon to sustain the charge of mis-declaration against the appellants unless there is corroborative evidence. In this case, however, we find from the statement of Shri H.R. Srinath, Incharge, Spinning Master that counts manufactured in regard to yarn of 34 and 35 were of higher counts because these counts have a good demand in the market and they wish to maintain the market. It was therefore, admitted in this statement that in regard to yarn of 34 and 35 count, yarn of higher counts was manufactured and supplied to the market. We have therefore, to hold that entries in the Wrapping register in so far as 34 and 35 counts are concerned, are corroborated by this statement.
7. We are however, unable to agree with the observations of the learned Collector that tolerance indicated in the CBEC letter of May, 1987 would not apply to the period in question. Tolerance limit only recognises the fact that there can be an error in spinning, sampling and testing of yarn. These instructions issued in May, 1987 have to be held as indicating what should be the correct tolerance limit while determining the count of yarn. We therefore, hold that tolerance limit which is 5% up to 40 counts and 3% for counts of 40 and above, has to be adopted in determining the count of yarn and also duty leviable.
8. In regard to other counts, there is no corroborative evidence and the statement relates specifically only to yarn of 34 and 35 counts and therefore, following the ratio of the Tribunal’s order, we hold that entries made in the Wrapping register cannot be relied upon. We therefore, set aside the order and remand the matter remanded to the Adjudicating authority for re-determining the demand in regard to counts of 34 and 35 after allowing tolerance limit in case of such yarn of 34 and 35 counts. Collector shall thereafter, pass such orders as deemed fit including the order relating to penalty, if any, leviable for the period in question.