Judgment:
1. The applicant filed this application for waiver of pre-deposit of duty amounting to Rs. 1,76,876.11. The learned Counsel submits that the applicants are engaged in the processing of grey fabrics. He submits that the Collector (Appeals) in the impugned order granted benefit of 2% in respect of shrinkage from the grey cloth during the processing.
He submits that the instructions issued by the Collector of Central Excise, Mumbai No. 1/94, dated 23-3-1994 from File No. V/T-3/Ch. 54 (30)1/94 are to the effect that shrinkage in respect of man-made fabrics comes to approximately 8% or so. He also relies upon the decision of the Tribunal in their own case, Order Nos. 71-72, dated 3-1-1995 where by the Tribunal remanded the issue back to the adjudicating authority for re-determination of the duty. In this case the Tribunal noticed the fact that some of the adjudicating authorities had allowed loss up to 5% and without any evidence a mechanical application of percentage of 2% is not sustainable. He therefore prays that the matter be remanded to the adjudicating authority.
2. Learned SDR reiterates the finding of the learned adjudicating authority.
3. In the present case the Collector (Appeals) held that the appellants are entitled to shrinkage to the extent of 2% in the case of man-made fabrics. The applicants rely upon the instructions of 1/94, dated 23-3-1994 issued by the Collector of Central Excise, Mumbai, where it is admitted that shrinkage in respect of man-made fabrics comes to 4%.
In view of these circumstances. I find balance of convenience in favour of the applicant and therefore waive pre-deposit of the whole of the duty for hearing of the appeal.
4. With the consent of both parties the appeal is taken up for disposal. The Tribunal in their own case by Order Nos. 71-72, dated 3-1-1995 where duty was demanded after granting benefit of 2% in respect of shrinkage is not accepted by the Tribunal and the Tribunal held in that order as follows : "After hearing both sides we find that in this case the Assistant Collector has mechanically applied the percentage of 2% and has ordered duty demand on the excess shortage noticed. On a perusal of the show cause notice, we do not find the lotwise position of shortages and also the nature of processing in respect of each lot.
Even if the percentage prescribed by the Board is to be respected by the authorities, the Board themselves in their instructions contained in F. No. 5A/462/64-CX. V have held that the percentages are by no means absolute and the adjudicating officers may give due weight to other considerations. It is also brought before us that in the case of man-made fabrics subject to similar processing, losses up to 8% have been condoned by some of the adjudicating authorities.
Having regard to these factors we are of the view that the lower authorities have not considered the issue in proper perspective and have mechanically applied the percentage of 2%. In the circumstances, we set aside the orders of the lower authorities and remand the case back to the Assistant Collector, who should consider lotwise position having regard to the nature of processing done and the test conducted in respect of such processing and thereafter allow permissible losses instead of mechanically adopting 2% in regard to all the lots. Appeal is allowed by way of remand." 5. In view of the above decision of the Tribunal the impugned order is set aside and the matter is remanded to the adjudicating authority for deciding the matter afresh after taking into consideration the above mentioned instructions and after affording an opportunity of personal hearing to the appellant.