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2019 (7) TMI 148 - AT - Central Excise100% EOU - Clandestine removal - case of the Revenue is based on the fact that the EOU to which the appellants were supplying the goods were not having manufacturing capacity and electricity connnection and was not in a position to use the goods supplied by the appellant - HELD THAT:- The appellants are manufacturer of polyester yarn and they were clearing the said yarn under valid CT-3 certificates to a 100% EOU located in Maharashtra. The appellants were also receiving AR-3s duly verified by Jurisdictional Superintendent. It is also noticed that CT-3 and AR-3 has not been challenged by Revenue as being false or fabricated. From the above set of facts, it is apparent that so far as appellants are concerned, they have discharged their responsibility cast upon them by the law. In this entire course of events, there is hardly any evidence to link the appellants with any activity after the goods were cleared. The law requires the appellant to clear the goods against the valid CT-3 and obtain the duly verified rewarehousing certificate. The appellant have done both and the same has not been challenged. In these circumstances unless specific involvement or knowledge of the appellant is established, no liability can be fixed on the appellants. The impugned order seeks to rely on circular no. 88/98 dated 02.12.1998 to hold that no physical verification of the goods were done at the recipient’s end and therefore, AR-3 certificates evidencing re-wareshousing of the goods can be discarded. It is not the responsibility of the appellant to get the physical verification conducted. Even if no physical verification was done, it cannot be alleged that appellants were wrong in their belief that their goods were re-warehoused at the EOU at Maharashtra. Whether to check physically or otherwise is entirely a 4 E/201-202/2011 prerogative of Revenue. The failure to check physical receipt of goods cannot be used against the appellant who has received duly signed re-warehousing certificates. Demand and penalty are set aside - Appeal allowed - decided in favor of appellant.
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