TMI Blog2014 (11) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... role; as a purchaser as well as seller of advance license/ARO and that he was something more than special power of attorney and also that he has not acted in a prudent manner. In our considered views, these findings of the Adjudicating Authority are correct and does not require any interference - Decided against the appellant. - Appeal No. : C/311,312,313/2006 - ORDER No. A/11779-11783/2014 - Dated:- 21-10-2014 - Mr. M.V. Ravindran and Mr. H.K. Thakur, JJ. For the Appellant : Shri H D Dave (Adv.) For the Respondent : Shri J Nagori (AR) JUDGEMENT Per : Mr. M.V. Ravindran; All these appeals are disposed of by a common order as they arise out of the same OIO on the self saying issue and question of letter. 2. The relevant facts that arises for consideration are; M/s Skyron Overseas Industries Ltd (100% EOU), (herein after referred to as main appellant) were registered with the Dept for manufacture of Polyester Twisted Yarn, Artsilk Polyester/Synthetic fabrics, sarees and dress materials and were registered as a 100% EOU as per the letter of permission granted to them by the Development commissioner, Kandla subject to fulfilment of certain conditions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attracted for their collection resulting in B 17 Bond being enforced. d) In a case where the question to be considered for the amount of customs duties forgone was sought to be collected in the manner authorised by law, the Supreme law in this domain Article 265 of the constitution of India which forbids levy and collection of taxes except by authority of law. The statutory provision which authorise collection of custom duty not levied or short levied or erroneously refunded is Section 29 of the Customs Act 1962. Thus, Section 28 of the Act is the only provision for collection of duty from a person through a process of adjudication for the recovery of customs duty which has not been levied. Therefore, for demand and recovery of Custom Duty from a pers0on without doing violence to Article 265 of the constitution the proper officer of Customs has to issue a show cause notice to that person under sub Section (10 of Section 28of the Act within the period of limitation prescribed there under and after considering his representation the duty recover able has to be determined under sub Section (2) of the said Section of the Act. The same is statutory mechanism for collection of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue department is not the non-mention of provisions of Section 28 of the Act read with the aforementioned conditions of B 17 Bond in the impugned SCN dated 3.12.2003 but the absence of the essential ingredients of the said conditions of the B 17 read with the Section 28 of the Act in the impugned SCN dated 3.12.2003. h) Thus, the only conclusion which emerged could be crystallised to hold that demand of duly without invoking Section 28 of the Act read with the aforesaid condition of B 17 Bond that is to say without alleging the necessary ingredients laid down thereof is not sustainable in law. In support of the contention and the stand as set out herein above in the forgoing the appellant heavily rely on the judgment in the case of Sterlite Opticals Ltd vs CC CE Aurangabad reported in 2011(270)ELT.266 (Tri. Mumbai) which covers the case of the appellant fully in toto in its entirety in order to vindicate its stands and contention. i) Once it is held that impugned SCN dated 3.12.2003 has been issued without jurisdiction since found as defective-in-law; the impugned OIO dated 20.12.2005 issued on 7.12.2005 is liable and deserve to be set aside and quashed without examini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied. Therefore, for demand and recovery of Central Excise Duty from a person without doing violence to Article 265 of the Constitution of India, the proper officer of Central Excise has to issue a show cause notice to that person under sub Section (1) of Section 11A of the Act within the period of limitation prescribed there under and after considering his representation, the duty recoverable has to be determined under sub Section (2) of the said Section of the Act. The same is statutory mechanism for collection of interest on Central Excise Duty as well under Section 11AB of the Act. n) Parliament has not enacted any special provision for collection of duty from any person by way of enforcement of B 17 Bond executed by that person. B 17 Bond executed by a person at the time of indigenously procured goods is a condition for total exemption from payment of Central Excise Duty in terms of the provisions laid down under notification No 1/95-CE dated 4.1.1995 for the indigenously procured raw material and it is a persons covenant to pay duty in the event of breach of mandatory post import conditions of the said notification. When such post import condition is violated of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11A of the Act read with the aforesaid condition of B 17 Bond the is to say without alleging the necessary ingredients laid down there of is not sustainable in law. Once it is held that impugned SCN dated 3.12.2003 has been issued without jurisdiction since found as defective in law; the impugned OIO dated 20.10.2005 issued on 7.12.2005 is liable and deserve to be set aside an quashed without examining other issues on merit involved in the subject case matter in question under adjudication thereby allowing the appeal of appellant with the consequential rife. r) On the basis of the settled position of law as set-out herein above in the foregoing; the legal and statutory position of law which emerges could be summarised to hold that neither the customs Duties nor the Central Excise Duties as proposed demand and recover from the appellant under the impugned SCN dated 3.12.20032 are sustainable in light of the facts that the impugned SCN dated 3.12,.2003 has been issued without jurisdiction since found to be defective in law. Consequent upon which; the impugned OIO NO 18/MP/2005 dated 20.12.2005; issued on 7.12.2005 is liable to be set aside and quashed on this ground alone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice refers to the statements recorded of the appellant Shri Mulchand Bhanvarlal Saran, then there is no need to issue a separate show cause notice to him. He would submit that the decision of the Tribunal in the case of Bombay Hospital Trust vs CC, Sahar, Mumbai 2005(188)ELT.374 (Tri.LB), Big Bags India Pvt Ltd vs CC, Bangalore 2008(228)ELT.400 (Tri. Bang)and and Sanjida Fabrics vs CC., Ahmedabad 2007(210)ELT.689 (Tri.Ahmd) would apply in these cases. 7. We have considered the submission made at length by both sides and perused the records. 8. At the outset, he would like to record that one of the appellant Shri Hastimal Jain has not been represented before us nor there is request for adjournment. It seems that the said appellant is not serious in prosecuting his appeal. Accordingly, the appeal filed by Shri Hastimal Jain is dismissed for non-prosecution. 9. We find strong force in the contentions raised by the Ld Counsel that, Shri Mulchand Bhanvarlal Saran has not been issued any show cause notice and hence no penalty can be imposed. We find that the show cause notice at Paragraph 29 reads as under : Further, Shri Anil Ganeshmal Maheshari, propr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cash basis without carrying out any manufacturing activity on it. The diversion activity started by him after receipt of the said Adv. Licence/ARO and invoices were prepared to cover up the illicit clearances of the goods. Further Shri Anil Maheshwari confessed that the total quantity of raw material cleared by them in the open market was inclusive of wastage and rejects and accordingly he calculated and stated that it was total 1,24,917.627 kgs of raw material sold out by them in the open market. I have noted that Shri Anil Maheshwai specifically stated that they had cleared the raw material in its original state without carrying out any manufacturing activity, which included the quantity of wastage and reject, shown in their records also but they had shown to have cleared the manufactured goods after manufacturing and subtracting waste and reject on paper only, thereby he admitted to have cleared 1,24,917.627 kgs of raw material without cover of any documents and without payment of duty leviable thereon. I have also noted that Shri Anil Maheshwai the proprietor admitted the offence committed by him. The confessional statement of Shri Anil Mahweshwari is further supported by a s ..... 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