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2010 (11) TMI 821 - CESTAT, MUMBAIWaiver of pre-deposit and stay of recovery - 100% EOU - raw materials indigenously procured by them without payment of Central Excise duty - demand is based on the finding that the said raw materials were not used for the intended purpose of manufacture of goods for export in discharge of export obligation but, instead, diverted - condition attached to Notification No. 1/95-C.E. ibid was that the indigenously procured raw material be used in the manufacture of finished goods for export – Held that:- In the absence of the requisite certificates from the Development Commissioner, it cannot be said that M/s. Umaji Overseas complied with this condition. The EOU apparently failed to satisfy the other important condition of having to attain Net Foreign Exchange proportionate to the value of the raw materials procured from indigenous sources. When the two prime conditions of the Notification were not satisfied by the EOU, they were required to pay the duty of excise foregone in respect of the raw materials indigenously procured by them under the EOU scheme. Therefore, prima facie, M/s. Umaji Overseas are liable to make pre-deposit of the amount of duty demanded by the Commissioner, stay application filed by M/s. Umaji Overseas, there is an averment that their factory was closed in August, 2002 and that they are not in a position to pre-deposit any amount of duty. There is also a reference to “balance sheet enclosed to this stay application” but not found any. Apparently, the appellant has no financial hardships, assessee directed to pre-deposit Job work - Penalty - counsel for M/s. Enkay Texofood Industries Limited has submitted that no penalty was liable to be imposed on them under Rule 26 of the Central Excise Rules inasmuch as this company did not collude with M/s. Umaji Overseas (assessee). It is submitted that this company undertook job-work for M/s. Umaji Overseas by making use of a diesel-driven generating set in the absence of electricity connection to their premises – Held that:- No evidence in support of this submission. The DGCEI officials, who visited the premises of this company, did not find any DG sets. They found no manufacturing activity in the said premises, no prima facie case for the above job-worker company against the penalty imposed on them. The learned counsel for this job-worker has also pleaded financial hardships, in support of which she has submitted that BIFR proceedings are on against them, BIFR notice in this connection but no order of BIFR declaring this unit to be sick has been produced, only a nominal pre-deposit vis-a-vis the above amount of penalty of Rs. 25 lakhs imposed on them. M/s. Enkay Texofood Industries Limited should, therefore, pre-deposit an amount of Rs. 2 lakhs under Section 35F of the Central Excise Act within four weeks.
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