2005 (7) TMI 552

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..... ondent. [Order per : T. Anjaneyulu, Member (J)]. - Heard both sides. 2. This appeal is filed against an Order-in-Original dated 30-9-2002 wherein the appellants were imposed a penalty of Rs. 3,00,000/- (Rupees Three Lakhs only) under Rule 173Q(1)(a) and (d) of the Central Excise Rules, 1944. The appellant is Noticee No. 5 along with others. In the Show Cause Notice, which was issued on 30 .....

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..... payment of processing charges. In the past, the appellants got their fabrics processed from M/s. AFL. 4. The aforesaid penalty was sought to be imposed on the ground that the appellants had connived with M/s. AFL by purchasing and keeping the processed fabrics, which were illicitly cleared by the said processor. The appellants submit that there is no proof of any such conspiracy or abatement .....

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..... attributed to them. There is not even an allegation that they had any reason to believe or any knowledge that the goods were liable to confiscation. Prima facie, penalty under Rule 173Q(1)(a) and (d) of the Central Excise Rules, 1944 on the supplier of raw material cannot be upheld. The Rule is applicable only to the assessee and dealers, but not traders and buyers. Therefore, the impugned order .....

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