ORDER
S.S. Kang, Member (J)
1. The appellant filed this appeal against the order-in-original dated 9-11-1994 passed by the Collector of Central Excise, Jaipur, In the impugned order the Collector of Central Excise confirmed the demand of Rs. 1,94,257.02 under Section HA of the Central Excise and Salt Act, 1944. The Collector also ordered confiscation of goods pertaining to nine 1 lots under Rule 173Q of the Central Excise Rules, 1944. The personal Penalty of Rs. 25,000/- was also imposed on the appellant under Rule 173Q of the Central Excise Rules, 1944. The appellants are engaged in manufacture of various varieties of blended yarn out of polyester staple fibre, artificial staple fibre (Viscose) and non-cellulosic synthetic waste (NCSW). During the month of February, 1994, the officers of respondents seized 895 packages of man-made yarn out of which 165 samples were drawn for chemical tests. The Deputy Chief Chemist, Central Excise Laboratory, Bombay gave a test report and only 11 samples were found to be different from description of the yarn given [by] the appellant. On the basis of sample reports, the officers of respondents again visited- the factory of the appellant and checked the clearance of man-made yarn in which the results of blended yarn was different from the parties declaration. A show cause notice was issued keeping in view the chemical results to show cause as to why the Central Excise duty amounting to Rs. 2,40,978.76 should not be recovered from the appellant under the provisions of Section 11A of the Central Excises and Salt Act, 1944 and the seized goods f should not be confiscated under Rule 173Q and a penalty should not be imposed on them. After adjudication the Collector of Central Excise passed the order and confirmed the demand vide order dated 13-6-1986. The appellant filed appeal before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal vide Final Order No. 474/91-D dated 12-10-1987 set aside the order passed by the Collector of Central Excise and remanded the matter to the Collector of Central Excise for de novo decision after granting opportunity of cross-examination of the Chief Chemist. Thereafter the matter was adjudicated by the Collector of Central Excise vide impugned order.
2. Ld. Counsel appearing on behalf of the appellant submits that on the request of the appellant, 11 samples were sent for retesting and out of result of retesting result of three samples were in favour of the party. Ld. Counsel further submitted that in the impugned order the Collector of Central Excise w-held that yarn under dispute is classifiable under Tariff Item 18-III(ii) of the Schedule to the Central Excises and Salt Act. Ld. Counsel submits that Tribunal in the case of appellant Reliance Chemtex Industries v. Collector of Central Excise, Jaipur vide Final Order Nos. E/161-162/91-D, dated 16-3-1991, the Tribunal held that spun yarn manufactured by the appellant is classifiable under T.I. 18-III(i) of the Schedule to the Central Excises and Salt Act. He further submits that in the impugned order, the Collector held that Chemical Examiner who examined the samples did not have any equipment which could determine whether the material was polyester or waste while conducting the test of finished [yarn]. He further submitted that the Collector of Central Excise in the impugned order only relied upon the mixing reports. He therefore prays that the appeal be allowed.
3. Shri M. Haja Mohideen, JDR appearing on behalf of the respondents submits that from the evidence on record it is proved that the appellants mis-declared the quantum NCSW (Viscose) in the blended yarn. He submits that the report of- the Chemical Examiner corroborates this fact. He therefore prays that the appeal be dismissed.
4. In this case total 165 samples were taken from the man-made yarn and were sent for chemical tests. Only 11 samples were found to be different from the description of yarn given by the appellants. On the request of the appellant, 11 samples were sent for retesting to the Chemical Examiner and the result of retesting three samples were found in favour of the appellant. The Collector of Central Excise in the impugned order admitted the fact that the Chemical Examiner did not have any equipment which could determine whether the material was polyester fibre or waste while conducting the test of finished yarn. The Collector of Central Excise while relying on the mixing reports held that yarn manufactured by the appellant in the impugned lots was made from polyester staples fibres and viscose blend and not from Non-cellulosic synthetic and is classifiable under Tariff Item 18-III(ii).
5. The Collector arrived at this finding only on the basis of mixing reports. There are cuttings and over-writings in the mixing reports. The Tribunal in the appellants own case vide Final Order Nos. E/161-162/91-D dated 16-3-1991 held that spun yarn manufactured by the appellant is classifiable under Tariff Item No. 18-III(i) and in view of the fact that Chemical Examiner did not have any equipment which would determine whether the matter was polyester fibre or waste while conducting the test for finished yarn. The impugned order is set aside and the appeal is allowed.