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TMI Blog2010 (1) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... rs were non existing and fictitious, is liable to pay Central Excise duty as it is evident that the said manufacturer had himself manufactured the said goods and cleared the same without payment of duty as the job workers to whom the inputs claimed to have been sent were found to be non existent and fictitious. (ii) Whether any benefit of Notification No. 47/94-C.E., dated 22-9-1994 can be given to a manufacturer on the plea that the clandestinely manufactured goods have been used in the manufacture of exported goods as the provisions of this notification are substantive and not merely procedural. (iii) Whether the CESTAT is correct to give benefit to the party who has earlier committed fraud and has not paid Central Excise duty and who has not come with clean hands, frank and full disclosure of the facts and has misled the CESTAT in passing an order in its favour. 3. The facts are that M/s. Woolways (India) Limited (hereinafter referred to as the 'Respondent') are manufacturer-exporter of Acrylic Yarn and Acrylic Knitwear Garments. The Respondents have been duly recognised as an Export House by the Government of India, Ministry of Commerce, New Delhi. The Respondents normally o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realities and situations of this kind of industry, a manufacturer-exporter has no option but to depend upon such brokers for his survival. 8. In the present case also, the Respondents supplied the raw material imported by them under duty exemption scheme to the various job workers through the network of brokers. The yarn was received by the Respondents from the job workers through the brokers, which was ultimately used by them for the manufacture of export products in discharge of export obligation prescribed under the various licences. It is pertinent to mention here that part of the processing was done in Unit-I or Unit-II of the Respondents themselves. But part quantity was got processed from out side as the Respondents did not have the capacity for processing the entire material in their own units. 9. During the year 1996-97 and 1997-98, the Respondents cleared acrylic fibre/mohir tops to the various job workers through the brokers. The name and addresses as given by the broker were entered in the records of the Respondents. After necessary job work, processed material was received by the Respondents in their factory which was ultimately used in the goods exported by the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he final product has ultimately been exported. The CESTAT records that the Revenue has not led in any evidence to show that the yarn was manufactured by the Respondents themselves in their factory. On the other hand the CESTAT appreciates the evidence on record which shows that the raw material has been used in the manufacture of final products which have been exported. 15. The Respondents drew our attention that on the basis of nonexistence of various job workers, inference has been drawn that the entire goods have been manufactured by the Respondents themselves and cleared without payment of duty. No evidence of procurement of acrylic fibre has been led in by the department. No evidence has been adduced to prove that Respondents had procured the acrylic fibre clandestinely which was used in the manufacture of acrylic yarn. 16. The Respondents further submitted that on the other hand, there is conclusive evidence to prove that the entire quantity of Acrylic fibre was imported by the Respondents against their various advance licences under the duty exemption scheme from time to time. There is not an iota of evidence to establish that the yarn after manufacture was cleared without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght on record to show the sale of the said yarn to some persons. In absence of any such material the entire case of the Revenue is based on assumptions and presumptions that is, as the job workers are fictitious, the entire yarn has been cleared clandestinely without payment of duty. It is well settled that duty cannot be confirmed on the basis of suspicion howsoever strong it may be. It has been held by the Supreme Court in the case of Oudh Sugar Mills Ltd. v. UOI, 1978 (2) E.L.T. (J 172) that findings arrived at without any tangible evidence and based only on inferences involving unwarranted assumptions are vitiated by an error of law. We also observe that the Appellants, on the other hand has brought on record the copies of Shipping bills, invoices, bank realization certificate, DEEC Books of export and redemption letters issued by the licensing authority accepting the discharge of export obligations by the Appellants. The Revenue has not contradicted any of these documents adduced by the Appellants. Thus it cannot be denied by Revenue that the Appellants have not exported the garments in fulfilment of their export obligation. The Appellants have shown the E.O. (Export Obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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