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2014 (8) TMI 1047 - AT - Central ExciseClandestine clearances of fabrics processed and cleared - actual manufacturer - duty demand - Held that:- Merely because the factory was registered in the name of the appellants and the same was given on license by the appellants to the said Chandan Processors/Ram Processors for carrying out the manufacturing activity, that in law would not make the appellants liable for payment of duty on the goods manufactured by the said Chandan Processors/Ram Processors. The appellant had licensed their factory to Chandan Processors, who manufactured the goods on their own account using their own labour and materials. The appellants had given their factory on license to Chandan Processors/Ram Processors, who were the actual manufacturers and who have during the investigations admitted to the manufacture and clearance of the goods and also undertaken to pay the duty. Thus, the duty is recoverable from the said Chandan Processors/Ram Processors and not from the appellants. The impugned Order passed against the appellants is therefore liable to be set aside. Further, in any event, penalty is not sustainable in view of the Hon’ble Delhi High Court judgment in Pioneer Silk Mills P. Ltd. v. U.O.I. [1991 (9) TMI 93 - HIGH COURT OF DELHI ] [upheld by Hon’ble Supreme Court in 2003 (11) TMI 75 - SUPREME COURT OF INDIA ], as the demand is for additional duty of excise under Goods of Special Importance Act to which the penal provisions of Central Excise Act, 1944 were not applicable for the period prior to 13-5-1994. The major part of the period in the present case is prior to 13-5-1994. The search operations took place on 30-5-1994 and there is no separate quantification of the duty for the period 13-5-1994 to 30-5-1994. - Decided in favour of assessee
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