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2016 (2) TMI 329 - AT - Central Excise100% EOU - diversion of imported material - Revenue has concluded that the suppliers were engaged in diversion of imported goods without payment of duty and appellant also issued CT 3 certificate to the suppliers to procure goods without payment of duty which have been diverted to the open market on the instructions of the appellants by the supplier. Therefore, the appellants are liable to pay duty along with interest and penalties on both the appellants have been imposed. - The defense of the appellants is that yarn in question i.e. PTY/PFY is an input for them to manufacture terry towel which have been used in manufacture of export goods which were ultimately exported which is not in dispute. Held that:- The Revenue has decided the case against the appellants on wrong premise that PFY/PTY is not the raw material to manufacture of export goods by the appellants. We find that evidence produced and a defense taken by the appellant is having evidentiary value over the evidence relied by the Revenue which are oral statements only. - in the absence of any corroborative evidence produced by the Revenue, the case of the Revenue is not sustainable. Appellants have been able to prove that PFY/PTY is the raw material and they have procured these raw materials on the strength of CT 3 issued by appellant for procurement of the same, therefore, the duty cannot be demanded from the appellants. - Decided in favor of assessee.
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