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2019 (7) TMI 824 - AT - Central Excise100% EOU - Valuation - material found unaccounted in the premises - raw materials procured by the appellant duty free from others - demand of duty at rates applicable to goods manufactured by 100% EOU - applicability of proviso to section 3 of CEA - HELD THAT:- In the instant case, the appellant are failed to account for a certain quantity of raw material procured by them and consequently, they are liable to pay duty. It is seen that the proviso to section 3 applies only to goods manufactured or produced by a 100% EOU. It therefore cannot be applied to the said goods which were clearly not produced by the appellant. In these circumstances, demand of duty in terms of proviso to section 3 of Central Excise Act cannot be upheld - demand to the extent exceeding the demand of duty forgone on procurement of said goods is set aside. Penalty is consequently, revised under section 11AC to the re-quantified duty. Invocation of penalty u/r 26 of CER - HELD THAT:- In the instant case there was diversion of significant quantity of material procured duty free under CT-3. Joy M. Godiwala was director of the unit and he had also admitted in his statement that all day to day activities of the unit including work related to central excise and customs was carried out as per his direction and instructions. In these circumstances, there is significant force to invoke rule 26 of Central Excise Rules and to impose penalty on Sh. Joy. M. Godiwala. The matter is remanded solely for qualification - appeal allowed in part.
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