Judgment:
1. Shri R. Nambirajan, learned Advocate, appearing on behalf of the appellants submitted that the period in dispute is December, 1987 to September, 1993. The factory was sold on 1-10-1993 to M/s. Terene Fibres (I) Ltd. (TFIL in short) who started manufacturing polyester staple fibre in their factory. On 30-4-1996 the Department took samples of crimped waste, fibre waste and soiled waste manufactured and declared by TFIL and sent the same for test by the Dy. Chief Chemist.
The Dy. Chief Chemist in his test report dated 15-5-96 gave opinion that these are other than waste. The Assistant Commissioner vide Order dated 25-2-1997 finalised the provisional assessment classifying the aforesaid four types of waste as good fibre and demanded differential duty. On appeal filed by the appellants the matter was remanded to the Assistant Commissioner for de novo adjudication. The Assistant Commissioner vide Order dated 17-6-99 dropped the proceedings in respect of crimped waste and confirmed the demand of duty only in respect of soiled waste and fibre waste. On an appeal filed by the applicants the Commissioner (Appeals) vide Order dated 14-9-2000 directed the Assistant Commissioner to decide de novo after issue of Show Cause Notice and with a specific direction that Dy. Chief Chemist's report of only those samples which were drawn during the period in dispute can be relied upon. The Dy. Commissioner without adhering to the direction of the Commissioner (Appeals) relied upon the same test report of the sample drawn on 30-4-96 and confirmed the demand of duty. On an appeal filed by the appellants, the Commissioner (Appeals) rejected the appeals, The contention of the ld. Counsel is that the Dy. Commissioner has clearly violated the directions given by the Commissioner (Appeals) vide Order dated 14-9-2000 and, therefore, the present impugned order confirming the said demand is incorrect and order of the Dy. Commissioner is liable to be set aside. The test report of the sample drawn on 30-4-96 cannot apply retrospectively for the period from December, 1987 to September, 1993. The ld. Counsel relied on the decision of the Tribunal in the case of C.C.E., Jaipur-1 v. Mangla Ispat Ltd. - Final Order No. A/905/2002-NB(D), dated 22-8-2002 wherein in para 12, the Tribunal has observed that "In so far as testing of a sample is concerned for which this sample was tested out of the goods produced much after the period for which the demand has been raised and thus the result of tests cannot be applied to the goods which were produced much before the date of taking samples". He also relied on another decision of Karnataka High Court in the case of Doddaballapur Spinning Mills Ltd. v. Asstt. Collector of Central Excise - 1992 (61) E.L.T. 539 (Kar.) particularly para 11 thereof to the effect "that short-levy must be something which should be demonstrable on the basis of material examined. It cannot be made on surmises. If the material for the period 14-11-1984 and 6-12-1984, disclosed by the tests conducted that the count was higher than 92, then there was jurisdiction to raise the question of short-levy for that period. But if no such test was conducted for the period anterior to 14-11-84, then there could have been no material. Therefore, we do feel compelled to record a finding in favour of the petitioner-Company that assessment of short-levy cannot be relatable to the production of yarn for the period between 15-6-1984 to 13-11-1984". Thus the submission of the ld.Counsel is that said decision squarely covers the issue involved in the present case in favour of the appellants, hence the impugned Order may be set aside and the appeal filed by the appellants may be allowed.
2. Shri M.H. Sheikh, learned J.D.R appearing on behalf of the Revenue fairly concedes that the issue involved in the present case is squarely covered by the above said decision.
3. After hearing both sides and perusal of the records, we set aside the impugned order and allow the appeal filed by the appellants.