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TMI Blog2015 (1) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 58 of the Customs Act, 1962. 3. The Appellants have been carrying on business and it is their case that the Deputy Development Commissioner has accorded permission to the appellants for supply of 1,04,000 Kgs., of textured yarn valued at Rs. 1,09,20,000/- to M/s. S. R. Industries Ltd., a 100% export-oriented unit under paragraph no. 109 of the Export Import Policy 1992-97. The requisite application in the prescribed Form was submitted by the appellants and it is the case of the appellants that even the said M/s. S. R. Industries Ltd. is also licensed as a private bonded warehouse. The show cause notice alleges that the appellants-consignor cleared Polyester Texturised Yarn (PTY)/Polyester Filament Yarn (PFY) to the consignee M/s. S. R. Industries Ltd. on the strength of CT-3 certificate obtained by M/s. S. R. Industries Ltd. The consignment was delivered to the transporters nominated by the said consignee. It has been alleged by the department in the show cause notice that the appellants' case is that no duty can be demanded in respect of the goods cleared on the strength of CT-3 certificates and on the basis of bond executed by the consignee. Therefore, it is the end use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but as far as the appellants are concerned, they are not held to be guilty of evasion of duty, then, such a finding cannot be sustained, particularly, when Rule 173Q and 209 are identically worded. 7. Reliance is placed by Mr. Shah on the judgment of the Hon'ble Supreme Court in the case of Amrit Foods v. Commissioner of Central Excise U.P. reported in [2005 (190) E.L.T. 433 S. C.] 8. Mr. Jetly appearing on behalf of the respondent, on the other hand, submits that all the appellants were aware of the allegations in the show cause notice. They have never disputed, as has been observed, that the duty has been evaded. The allegations insofar as evasion of duty by the noticee, have not been controverted. Our attention is invited to paragraph nos. 11 to 13 of the Order-in-Original and equally the findings affirming the same in the Tribunal's order. Mr. Jetly submits that once the allegations and replies in the notices point out to an undisputed and uncontroverted fact, then, the only aspect which has to be noted is the responsibility and culpability. This is a case where the goods have been diverted to the local Bhiwandi market with the help of unscrupulous brokers by the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased suppliers were aware of the fact that the goods are not going to the unit of appellant No. 1 but are diverted to the Bhiwandi market. They were aware that the goods are not required in the manufacture of towel. However, they were supplying the goods based upon such certificates and were receiving back warehousing Form AR3-A and some of them containing forged signatures. The motive for whole exercise was to share the duty evasion among the management of said S.R. Industries Ltd., the Gujarat based suppliers/units, brokers involved and some money to certain employees. 11. The Tribunal as also the Commissioner found that there is no challenge by any of the appellants to the fact that these goods from six units were cleared without making payment of duty, to another unit namely S.R. Industries Ltd. It was diverted and sold in Bhiwandi market. The findings in that regard in both the orders are concurrent. It is in these admitted factual circumstances that we have to consider the submission of Mr. Shah. We find from the reading of relevant paragraphs of the impugned order that there appears to be no dispute with regard to these events and role of the parties therein. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Managing Director Jhunjhunuwala is apparent from the undisputed and uncontroverted evidence and admissions. The Commissioner's findings and which are reiterated in paragraph no. 14 of the order of the Tribunal, cannot be termed as perverse. The Tribunal upholds these findings of fact and observes that it has no hesitation, in holding that the appellant Nos. 7, 8 and 9 namely the appellants before us were not only having full knowledge of the case but they actively involved in the said transaction by getting extra money over and above the normal price. 12. The reliance on the final order of the Commissioner and the directions in that behalf of imposition of penalty cannot be faulted. Rules 173Q and 209 on which reliance is placed permits imposition of penalty on any manufacturer, purchaser, registered person of a warehouse or registered dealer responsible for removal of excisable goods in contravention of provisions of the rules and also without payment of duty, if any, leviable on the same. Once we find that there is no specific case as of the Central Excise Rules, then prevailing have not been contravened, and there is no intention to evade payment of duty, then, the arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department decided against the appellants on the ground that the products of the appellant contained stabilizing agents. The appellants contended that the quantum of stabilizer was minimal. The argument was that the products were basically Milk products or other dairy products. It is in those circumstances and the specific argument was that Rule 173Q under which the penalty was imposed, was not referred to in its entirety that the penalty came to be set aside. In this context, the Supreme Court made the observations relied upon. The Tribunal in that case set aside the order of the Commissioner on the ground that neither the show cause notice nor the order of the Commissioner specified which particular clause of Rule 173Q had been allegedly contravened. The rules were referred and it was proved that the contents of the clauses are not the same. However, the argument before us is not that any of the contents of the clauses were not referred to. The argument is that the rule as such namely 173Q and 209 could not have been invoked firstly because the appellants were not put to notice and secondly because there was no evasion of duty on the part of the appellant No. 5, and hence, imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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