SC: NDPS Disposal Rules Do Not Prevent Interim Release of Seized Vehicle to Innocent Owner  ||  SC: Police Can Register FIR for Threatening Witness under S.195A IPC Without Court Complaint  ||  Supreme Court: Pre-Litigation Mediation Not Required for Cases of Continuing IPR Infringement  ||  Madras HC: Customs Brokers’ Offence Report Need Not Be Penal; 90-Day Period Starts on Receipt  ||  Delhi HC: Police Evidence Valid Even if Narcotics Search and Seizure Were Not Videographed  ||  Orissa HC: Court Must Pass Decree Based on Mediation Report Once Dispute is Referred to Mediation  ||  Delhi HC: Employees Strictly Liable to Return Company Property Upon Termination of Employment  ||  Delhi HC: Cheques Issued Solely as Security Cannot be Encashed for Any Existing Debt  ||  Delhi HC: Changing POCSO Victim’s Clothes Before Medical Examination Does Not Affect Evidence  ||  Delhi HC: Legal Heirs Can Seek Impleadment in Pending Appeals under FEMA    

Vandevi Texturisers (P) Ltd. and Ors. Vs. C.C.E. & S.T., Surat-I - (Customs, Excise and Service Tax Appellate Tribunal) (12 Sep 2019)

Once goods were certified to be warehoused by consignee, consigner cannot be held responsible for contravention of law

MANU/CS/0193/2019

Excise

The brief facts of the case are that, the Appellants are engaged in the manufacture of Polyester Knitted Fabrics from Polyester Yarn. They are clearing their finished goods to other 100% EOUs against CT-3 certificates. During the relevant period, they had cleared goods to EOU unit Sunshine Overseas, Navsari which is also an 100% EOU. Investigations were carried out.

Based upon the investigation, show cause notice was issued demanding duty amounting to Rs. 34, 86, 256 on 231415.217 kg of Polyester Yarn alleging the same was not used in manufacture of fabrics but were diverted in the open market. It was also proposed to confiscate the same and to impose penalty under Section 11AC of Central Excise Act, 1944 and Rule 26 of Central Excise Rules, 2002. Penalty on other Appellant was also proposed. Vide Adjudication Order, the demands as proposed were confirmed and penalty was imposed. The diverted goods were also ordered to be confiscated with an option to redeem the same on payment of redemption fine. Against the said order, the Appellants filed the appeal before the Commissioner (Appeals), who vide impugned order-in-appeal upheld the Order-in-Original against the present Appellants.

Once the statements has been made basis for alleging clandestine clearance, the adjudicating should have granted cross examination. The Appellant during the adjudication proceedings, had sought cross examination of the persons, whose statements were relied upon in the show cause notice. The same was necessary in terms of Section 9D of the Central Excise Act which was not allowed. When the demands and the allegation of removal of Polyester Yarn was based upon the statements of the persons in that case, it was mandatory for the adjudicating authority to grant the cross examination of such persons whose statements are sole evidence to make allegations against the Appellant. In absence of same the statements cannot form basis for alleging contravention of law by the Appellant.

Further, the Appellant Unit has cleared the goods against CT-3 Certificates and the goods were certified to be warehoused by the jurisdictional Excise authority of M/s. Sunshine Overseas. The documentary evidences in the form of CT-3, AR-3, D-3 Declarations, maintenance of statutory registers, filing periodical returns, which are undisputed clearly shows that, the manufacture and supply of finished goods to Sunshine Overseas has not been negated by the Revenue with the assistance of any corroborative evidences. Even during the investigation, no buyer of Polyester Yarn has been brought on record to show that, the Appellant had cleared said raw material clandestinely to any person.

There is no evidence of transportation of any raw material or sale of goods to any buyer or unaccounted receipt of any cash amount from any person on account of sale of raw material. Once the goods were certified to be warehoused by the consignee, the consigner, i.e. the Appellant, cannot be held responsible for contravention of law. In such case, no demand can be made against the Appellant. The demand against the Appellant Unit and penalty against all the Appellants are not sustainable. The impugned order is set aside. Appeals allowed.

Tags : DEMAND   PENALTY   CONFIRMATION  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved