TMI Blog2015 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... such job worker or they do not have any loom to manufacture of fabric. The so called job workers in their statements clearly stated that they did not carry out any job work on behalf of M/s Loomcraft and M/s Fabricart. Goods manufactured by the Applicant M/S. VTL is neither exported nor cleared on payment of excise duty and without the permission of the development commissioner. The Applicant cleared said manufactured goods clandestinely without payment of duty. Thus the Applicant(VTL) appears to have grossly violated the conditions of the exemption notification No.53/97-Cus. Therefore in our view the demand of custom duty confirmed on the capital goods is prima facie correctly demanded. As regards claim of the Applicant for depreciation in the valuation for calculation of custom duty, we are of the view that once vital conditions of the notification is not complied with, the Applicant is not eligible for the exemption notification. The depreciation provision being part of the said notification shall also not be prima facie available. M/s Loomcraft and M/s Fabricart are directly involved in abeting and aiding the evasion of excise and custom duty committed by VTL. - Applicants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings Pvt Ltd were not having any manufacturing facility. In the investigation it was revealed that claim of the appellant that M/s. VTL have not manufactured the goods under reference and that M/s. Loomcraft Fabrics Pvt. Ltd. got the goods manufactured from job workers viz. M/s. Ansari Home Textiles, Malegaon, M/s. Kamal Textiles, Malegaon, and M/s. Skill Silk Mills, Aurangabad found to be incorrect. On further investigation, that two job workers were not found having any loom/machinery, they were found to be residential premises of Retired teacher and person working in medical shop, who in their statements have stated that they have not done any business of manufacturing of fabrics. Similarly M/s. Skill Silk Mills do not have any machinery for manufacturing of premium quality Jacquard Fabrics. The Proprietor of M/s. Skill Silk Mills, Aurangabad in his statement stated that no job work was done for M/s. Loomcraft Fabrics Pvt. Ltd. Director s Report in balance sheet of M/s. Loomcraft Fabrics Pvt. Ltd for 2000-01 also confirmed that goods were not manufactured on job work basis as balance sheet discloses information about employing imported plant machinery which is machinery of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Raymond on job work basis by M/s. Loomcraft were actually manufactured on the looms of M/s. VTL. (iii) Some customers such as M/s. S.K. Handicraft, M/s. Jagdish Stores and M/s. Marriot Welcome Hotel have placed orders on M/s. VTL whereas material was shown to have been supplied from M/s. Loomcraft and M/s. Fabricart. (iv) M/s. Raghuveer Synthetics, M/s. JKT, M/s. Makhariya were shown to have done job work for M/s. Loomcraft. However dispatch register of M/s. VTL confirmed that goods were dispatched to these parties by M/s. VTL but job work challans etc were not prepared in the name of M/s. VTL, it was prepared in the name of M/s. Loomcraft. These transactions were reflected in the records of M/s. Loomcraft and M/s. Fabricart, by this way the records were fabricated and prepared in the name of M/s. Loomcraft and M/s. Fabricart. (v) M/s. Osho and M/s. MK Enterprises have sent yarn for job work to M/s. Loomcraft for manufacturing of fabric. Warping register of M/s. VTL revealed that material was manufactured by M/S. VTL for M/s. M K Enterprises and M/s. Osho. (vi) Shri. Shafeeq Ahmed, Director of VTL and M/s. Fabricart in his statement dated 2/11/2004 has admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(b) of Customs Act, 1962 penalties are here by imposed on the following noticees to the extent of amount as shown against their names. Name Amount 1) M/s. Loomcraft Fabrics Ltd, Aurangabad ₹ 25 lakhs 2) M/s. Fabricart Furnishings Pvt. Ltd. A Bad ₹ 15 Lakhs 3) M/s. Rafeeq Ahmed Khan ₹ 27 lakhs 4) Shri. Shafeeq Ahmed Khan ₹ 27 lakhs 5) Shri. Zeheer Ansari ₹ 25 lakhs B(1) Demand of Central Excise duty of ₹ 4,33,75,032/- is hereby confirmed against M/s. VTL under the Proviso to Section 11A(1) of Central Excise Act, 1944 and the Conditions of the bond executed by M/s. VTL. B(2) Amount of interest on the aforesaid Excise duty amount is hereby confirmed as recoverable from M/s. VTL in terms of Section 11AB of Central Excise Act, 1944 and the conditions of Bond Executed by M/s. VTL. B(3) A penalty of ₹ 4,33,75,032/- is hereby imposed on M/s. VTL under Section 11AC of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty calculation is also wrong. It is his submission that the value of the goods adopted on the basis of raw material cost plus job work charges is on assumption basis on the ground that the department itself alleges that goods have been cleared and sold therefore when goods were sold, cost construction method could not have been adopted. He submits that M/s. Raymond have sent the goods to M/s. Loomcraft for job work under the provisions of Rule 4(5)(a) of CCR, 2004. They have received the goods back from M/s. Loomcraft and after further processing, M/s. Raymond have cleared the final product at appropriate rate of duty at their end. Once the duty has been discharged on the final product manufactured, duty on semi processed goods obtained from the job worker, cannot be demanded from 3rd party like M/s. VTL. He submits that in the earlier proceedings this Tribunal has remanded the matter to the adjudicating authority vide order dated 5/12/2007 on the ground that duty has to be re-worked out. It is his submission that since the Tribunal has found that quantum of duty prima facie appeared to be incorrect, the matter was remanded. However the adjudicating authority has not considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Loomcraft, has been proved wrong as no job worker was found to have undertaken the job work for M/s. Loomcraft and M/s. Fabricart. In this situation all the goods sold by M/s. Fabricart and M/s. Loomcraft is that goods which was produced in the unit of M/s. VTL. This fact was further corroborated with the records recovered from the applicants(M/s. VTL) factory. All the directors of applicants(M/s. VTL) company as well as of M/s. Loomcraft and M/s. Fabricart admitted manufacture and clandestine removal. As regard the custom duty demand on the capital goods, he submits that the exemption on import of the capital goods for EOU under notification NO. 53/97-CUS is available only when the condition laid down in the said notification is complied with. Capital goods imported must be used for manufacture of final product which is either exported or cleared for DTA on payment of appropriate excise duty with the permission of development Commissioner. In the present case, neither the goods cleared for export nor cleared for DTA on payment of duty. Therefore exemption under Notification 53/97-CUS is not available to the applicant. He submits that applicants should be put to term of pre- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the export import policy, the capital goods imported by 100% EOU is exempted with the conditions that the same is used for manufacture of the final product which should either be exported or cleared in DTA on payment of excise duty with the permission of Development Commissioner. In the instant case the goods manufactured by the Applicant M/S. VTL is neither exported nor cleared on payment of excise duty and without the permission of the development commissioner. The Applicant cleared said manufactured goods clandestinely without payment of duty. Thus the Applicant(VTL) appears to have grossly violated the conditions of the exemption notification No.53/97-Cus. Therefore in our view the demand of custom duty confirmed on the capital goods is prima facie correctly demanded. As regards claim of the Applicant for depreciation in the valuation for calculation of custom duty, we are of the view that once vital conditions of the notification is not complied with, the Applicant is not eligible for the exemption notification. The depreciation provision being part of the said notification shall also not be prima facie available. M/s Loomcraft and M/s Fabricart are directly involved in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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