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2018 (12) TMI 12 - AT - Central Excise100% EOU - penalty u/r 26 of CER - Clandestine removal - duty free yarn procured domestically as well as imported - Held that:- It is an admitted fact that the premises of job workers were used to show supply of duty free yarn and manufacture there from in that job worker’s premises but in the investigation, it is established that the job workers had no manufacturing facility. Therefore, the job work premises were used only to mislead the department by showing fake job work and consequently cleared the duty free yarn in the open market. In the process of duty evasion, the job workers have actively contributed in duty evasion inasmuch as the premises of job worker were shown to have rented out to M/s. PPL. Moreover, the job work challans were also signed by those job workers. Despite the fact known to them that there is only paper transaction is being done, the job workers have signed the blank challans which were used by M/s. PPL for showing the job work. Therefore, the appellants (job workers) mentioned at serial No. 1 to 7 were actively involved in facilitating M/s. PPL for clandestine removal of duty free yarn - they are rightly liable for penalties under Rule 26 / 209A. Penalty on other appellants, M/s. Regent Overseas Pvt. Limited and M/s. Pooja Tex Prints Pvt. Limited to whom M/s. PPL had shown clearance, - Held that:- It is seen that they had also actively and knowingly connived with M/s. PPL in diversion of duty free raw materials inasmuch as manipulating the documents to show the receipt of grey fabrics of heavier GSM whereas in fact they had received the grey fabrics of lighter GSM. Thus, they have facilitated M/s. PPL by showing receipt of goods from M/s. PPL and are correctly liable for penalty under Rule 209A of erstwhile Central Excise Rules, 1944 / Rule 26 of Central Excise Rules, 2001/2002. Penalties upheld - appeal dismissed - decided against appellant.
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