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2015 (4) TMI 69 - AT - Central Excise100% EOU - whether demand of Central Excise duty alongwith interest and penalty and confiscation of the quantity of 31.537MT of Aluminium ingots and 64.902MT of finished goods cleared by the assessee to M/s. Sai Flipped Coil Pvt. Limited and M/s. Vitrag Impex, respectively, manufactured out of duty free raw materials are sustainable - Held that:- Assessee obtained permission from the Central Excise authorities to supply the goods to M/s. Sai Flipped Coil Pvt. Limited. As per sale contract, the goods were delivered on FOB Rajkot. The said Company also admitted receipt of the goods. In any event, it is the responsibility of the advance license holder to fulfil the conditions. It is significant to note that advance license holder has provided EODC certifying discharge of export obligation under the advance license. Similarly, the supplies made to M/s. Vitrag Impex in DTA against receipt of foreign exchange. The appellants sought for permission for sale in DTA from the Development Commissioner based on the purchase order placed on the appellant by M/s. Reza Overseas Metal Trading of UAE for delivery of goods to M/s. Vitrag Impex. It is important to note that the said sale was made on full payment of duty. No justification to raise demand of Central Excise duty on the goods supplied to the said Companies. So, the demand of Central Excise duty alongwith interest and confiscation of goods and imposition of redemption fine in respect of supply of materials to the said two parties are not sustainable. Demand of duty alongwith interest and imposition of penalty as well as confiscation and imposition of redemption fine on the raw materials and the finished goods except shortage of 5.867MTs of Zinc Scrap, on the assessee, are not sustainable. The learned Advocate had not seriously disputed the demand of duty on 5.867MTs Zinc Scrap. It is seen from the adjudication order that, it was admitted that the goods were cleared clandestinely and therefore, penalty under Section 11AC of the Act, 1944 is justified. But, the goods were not available for confiscation and, confiscation of goods and imposition of fine was not proper and legal. As the demand of duty and confiscation of goods are not sustainable, imposition of penalties on the appellants are not warranted. Impugned order is modified to the extent the demand of duty alongwith interest and imposition of penalty of equal amount of duty as determined on 5.867MT Zinc Scrap found short as per Panchnama dated 27/ 28.04.2005 are upheld, and all other demand of duties along with interest, confiscation and imposition of fine and penalties are set-aside. As the adjudicating authority had not given an option to pay penalty of 25% of the duty, within thirty days along with duty and interest from the date of receipt of adjudication order as per Section 11AC (i) of the Act, the assessee is given an option, to pay the penalty 25% of the duty alongwith duty and interest on 5.867MT of Zinc scrap, within thirty days from the date of receipt of this order. Failure to which, the assessee shall pay the penalty of equal amount of duty as determined. - Decided partly in favour of assessees.
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