TMI Blog2010 (11) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... the EOU scheme. Therefore, prima facie, M/s. Umaji Overseas are liable to make pre-deposit of the amount of duty demanded by the Commissioner, stay application filed by M/s. Umaji Overseas, there is an averment that their factory was closed in August, 2002 and that they are not in a position to pre-deposit any amount of duty. There is also a reference to “balance sheet enclosed to this stay application” but not found any. Apparently, the appellant has no financial hardships, assessee directed to pre-deposit Job work - Penalty - counsel for M/s. Enkay Texofood Industries Limited has submitted that no penalty was liable to be imposed on them under Rule 26 of the Central Excise Rules inasmuch as this company did not collude with M/s. Umaji Overseas (assessee). It is submitted that this company undertook job-work for M/s. Umaji Overseas by making use of a diesel-driven generating set in the absence of electricity connection to their premises – Held that:- No evidence in support of this submission. The DGCEI officials, who visited the premises of this company, did not find any DG sets. They found no manufacturing activity in the said premises, no prima facie case for the above job-w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and, therefore, these parties have not been able to make an effective counter to the allegations in the show-cause notice. In this connection, the learned counsel has invited our attention to a series of letters which represent correspondence between Umaji Overseas and the Commissioner or the investigating agency. Some of these letters indicate that the office of the adjudicating authority directed M/s. Umaji Overseas to the investigating agency (DGCEI to obtain copies of certain documents. It is submitted that, though DGCEI was approached, no document was supplied. 3. Learned JCDR, representing the Revenue has made an endeavour to demolish the above claim of M/s. Umaji Overseas and its partners. It is submitted that these parties acknowledged receipt of the documents which they wanted. In this connection, the learned JCDR has filed copies of four documents viz : (1) acknowledgment dated 19-1-2009 wherein Shri Rakesh Jain, partner of Umaji Overseas acknowledged receipt of copies of clear and readable documents/records/registers listed at serial numbers 1 to 65 of the annexure to panchanama dated 7-8-2002; (2) STATEMENT A showing details of 15 documents/records referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions on merits as well. It appears from the records that the demand of duty on M/s. Umaji Overseas is in respect of raw materials indigenously procured by them under CT-3 certificates. The basis of this demand is that these raw materials were diverted instead of being used in the manufacture of export-goods in the EOU of M/s. Umaji Overseas. The case of the Revenue is that, on account of such diversion of raw materials by the EOU, the prime condition attached to Notification No. 1/95-C.E. dated 4-1-1995 stood violated and the benefit of the Notification would not be admissible to the EOU and consequently the entire amount of duty of excise is recoverable in respect of such raw materials, from the EOU. It is submitted that the EOU did not submit the requisite periodical returns (QPR/APR) to the Development Commissioner and did not obtain the requisite export obligation discharge certificate from him. In the absence of these certificates, M/s. Umaji Overseas are liable to pay the entire amount of Central Excise duty foregone in terms of Notification No. 1/95-CE ibid. The learned counsel for the appellant has referred to certain proceedings taken by the department against four c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the raw materials which were claimed to have been used in the manufacture of goods supplied to Asharani Garments were diverted without being used in such manufacture. In their attempt to disprove some of the allegations of the department, M/s. Umaji Overseas pleaded that some of the raw materials procured indigenously were sent to job-workers and that the finished goods produced by the job-workers were duly received in the EOU and subsequently exported. The investigating agency visited the premises of these job workers and found that there was no manufacturing activities there, a fact noted in the relevant panchanama and not successfully rebutted in the relevant statements given under Section 14 of the Central Excise Act by the job-workers. Prima facie, M/s. Umaji Overseas have failed to substantiate the plea of job work as a defence against the department s allegation of diversion of raw materials. 6. In an overall assessment of the evidence available on record, we hold that, for the present purpose, that M/s. Umaji Overseas have not established prima facie case on merits against the demand of duty. It is not in dispute that they did not obtain export obligation discharge cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of export-goods valued at about Rs. 9.24 crores which were claimed but not shown to have been supplied to M/s. Asharani Garments. This would amount to 27% of the duty demanded by the Commissioner, which works out to Rs. 9.99 crores. 7. In the stay application filed by M/s. Umaji Overseas, there is an averment that their factory was closed in August, 2002 and that they are not in a position to pre-deposit any amount of duty. There is also a reference to balance sheet enclosed to this stay application but we have not found any. Apparently, the appellant has no financial hardships. 8. In the result, we direct M/s. Umaji Overseas to pre-deposit an amount of Rs. 9.5 crores (Rupees Nine Crores and Fifty lakhs) within a period of four weeks and report compliance on 21-1-2011. In the event of due compliance, there will be waiver of pre-deposit and stay of recovery in respect of the balance amount of duty (with interest) as also in respect of the penalties imposed on M/s. Umaji Overseas and its partners. 9. The learned counsel for M/s. Enkay Texofood Industries Limited has submitted that no penalty was liable to be imposed on them under Rule 26 of the Central Excise Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X
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