TMI Blog2007 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied by their fourteen sup pliers never reached the premises of M/s. Santogen Textile Mills Limited but were diverted midway from Bhiwandi to local weavers and was never used in the manufacture of fabrics which were exported under twenty four shipping bills referred to in the show cause notice and exported material was manufactured out of goods obtained from elsewhere. The Revenue's case is based on the statements of fourteen suppliers of yarn who have stated that they have supplied the yarn upto Bhiwandi as per appellants' request except in two cases where yarn is said to have been picked up from their premises by M/s. Santogen Textile Mills Limited, the statements of the transporters who stated that they have delivered the goods upto Bhiwandi only in the godown mentioned by the suppliers be longing to the transporters/suppliers or claimed to be that of M/s. Santogen Tex tile Mills Limited itself. The vehicles under which the yarn is said to have been transported from Bhiwandi to Mumbai do not find mention in the octroi record, nor are there any records to show delivery of the goods at the premises of M/s. Santogen Textile Mills Limited. Further M/s. Santogen Textile Mills Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her par ties also and there has been no dispute with regard to procurement from the other parties. Their export obligation was fully discharged. The goods receipt was duly verified by the Central Excise officers. As regards job-work, Shri N.P. Deora who is one of the directors of the job worker as well as the appellants and is brother of one of the director has given wrong statement on account of family dispute and that one Shri Shivratan G. Saraf whose statement was earlier re corded has admitted that M/s Santogen Textile Mills Limited received yarn from the appellants and grey fabric sent and the fabric was transported by their own vehicles and therefore statements of the transporters, that they did not transport the goods, is irrelevant. In view of this, it was submitted that the department's case is based purely on the statements of persons but once documentary evidence to the contrary is available in the form of re-warehousing certificate and movement of goods for job work under officer's signature, oral evidence inconsistent with the same should be discarded. 3. In any case, it was submitted that even for a moment if it is presumed but not admitted that raw material i.e. gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iplicate application to the officer-in-charge of the warehouse of removal in the manner laid down in sub-rule (4) of rule 156A, and the duplicate application endorsed with the re-warehousing certificate has also not been received by such officer from the officer-in-charge of the warehouse of destination, the consignor shall upon a written demand being made by the former officer, pay the duty leviable on such goods within ten days of the notice of demand 6. It was submitted that as per these provisions firstly duty can be demanded only if re-warehousing certificate is not received which is not so in the present case as re-warehousing certificate has been received and submitted to the department and further rule is very clear that duty can be demanded from the consignor only and not from the consignee and therefore in such a case the duty should have been demanded from the suppliers of the yarn and not from them. 7. As regards Rule 196 under which also duty can be demanded, it was submitted that in this case also duty can be demanded only "if any excisable goods obtained under rule 192 are not duly accounted for as having been used for the purpose and in the manner stated in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 10. As regards penalty imposed on the directors S/Shri Vinod Deora and Suresh S. Deora and Manik C. Sharma neither order nor show causenbtice brings out any material to show that they were directly involved in the function ing of the company and that they have physically dealt with the goods which are liable to confiscation. In such a situation penalties under Rule 209A cannot be imposed. 11. We have considered the submissions. We find that so far as the factual position is concerned, the appellants' main plea is that the goods have been received by them in their 100% EOU premises and used by them in the manufacture of export products. This is supported by the fact that rewareh9usir certificates duly signed by the jurisdictional officer were submitted and the yarns so received were sent to job worker under proper challans and also received under challans and these challans were signed by the officers. Therefore in such a case where the documentary evidence is available to show receipt and utilization of raw material received under exemption, Revenue's case cannot sustain which is based only on the statement of some persons and that documentary evidence has to prevail in comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through tempos. It is also found that fictitious firm in the name of M/s. A.N. Yarns was created and run by Shri Rajesh Agarwal who was also Export Executive of M/s. STML. In respect of M/s. Baroda Textiles Ltd., it was found from the lorry receipts seized that the consignments removed by them were transported by M/s. Jaydeep Transport Agency and this agency was found to be fictitious firm and non existent. Further, the vehicle numbers mentioned in these lorry receipts revealed that some of the vehicles were not capable of transporting the goods as these were dumpers, rickshaw, or light motor vehicle trailers. In respect of Sanghi Spinners Ltd., Shri Rajesh Agarwal of the appellants admitted that the goods were unloaded at Bhiwandi. In respect of M/s. Euro Cotspin Ltd., Patiala, though re-warehousing certificate of 72 MT was issued it was admitted by the appellants that a quantity of 45 MT was never received and remaining 27 MT was recorded only after the records were seized by the Income-tax Officers. It was only in the case of M/s. Shamken Spinner Ltd., Mathura, M/s. Shree Sanand Textile Industries Ltd., Ahmedabad and M/s. Ramgopal Polytex Ltd., Thane that the goods are said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was wrong on account of family dispute, they have been unable to show any corroborative evidence like pay ment of transport charges, payment for the job work etc. It also came to light that M/s. Santogen Silk Mills Ltd, Kadipur, Bhiwandi, Thane was shifted partly to Ankleshwar and partly to Patalganga in the year 1994 and hence there was no question of doing any job work in this unit at Kadipur. Though the appellants claimed that one Shri Shivratan C. Saraf had earlier stated that the goods were received from M/s. STML, this statement was contradicted by Shri N.P. Deora, one of the Directors of the job worker who also stated that Shri Saraf had left the services in September, 1995 and only looked after arrangements of cutting and folding department and the letter heads did not belong to them. Shri Saraf could not produce any production register, job registers, bills and payment for job work nor the appellants could provide the same. In such case denial of cross examination of Shri Deora cannot be faulted with. In case of fourth job worker M/s. Deora Silk Mill, Murbad, though it claimed to have done the job work, it could not show any evidence regarding payment receipt for the job ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciliation statement is for the period from 1-11-1995 to 30-6-2000 whereas what was required to show was for the period November, 1995 to January, 1997 which is relevant for the purpose of show cause notice by showing that what was pro cured by them was actually utilized in the export made by them in the twenty five shipping bills and that quantity of respective yarn contained in export fabrics under twenty five shipping bills along with stock of yarn, if any, lying in their premises on the day of search matches with each other and that the goods already exported upto January, 1997 were not made out of raw materials which has not been shown to have been procured under the relevant CT-3 certificates or blended fabrics, if any, received upto that date. This is totally lacking. 15. As regards certificates and challans signed by the jurisdictional officers it is established on account of above factors that the officer incorrectly signed these certificates by looking at the fabrics which were different from the one which were procured as it is on record that they did not verify marks, numbers and composition of the fabrics. The fact that the re-warehousing certificates have been fals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /95 the liability to pay duty is on the supplier of the goods. 17. We however find that as per the provisions of Notification No.1/95-C.E. the goods are exempted for the purpose of manufacture, packaging, etc. when brought into hundred percent EOU subject to the condition that hundred per cent EOU files a bond with the Assistant Commissioner for proper accountal of receipt, storage and utilization of such goods and to pay on demand an amount equal to the duty leviable on the goods and interest, if the goods, other than capital goods, are proved to the satisfaction of the Assistant Commissioner of Customs or Central Excise to have not been used in connection with the production or packaging of goods for export out of India. In this case it is not denied that the goods were delivered to the appellant though delivery as per their instruction was upto Bhiwandi. Therefore in a case where the goods after taking delivery are not brought into hundred per cent EOU and not used in the manufacture of export products, exemption ceases to be available and duty be comes demandable for non accountal of the goods because as per terms of notification 1/95 goods cannot be put to any other use. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 477 (Tri.-Mum). 19. In view of the above, we hold that the duty has been rightly demanded from the appellants and we uphold the demand 20 We find that the appellants have taken the plea that the Commissioner has demanded the duty in respect of three shipping bills in respect of which the matter was settled by the Settlement Commission. The appellants have. not produced any evidence to show that after settlement they have paid the con firmed duty If they produce the proof thereof duty to that extent will stand set aside 21. Another plea taken is that the price should be treated as cum duty price. This is not applicable in the present case as the goods were cleared under exemption and duty is being demanded as the exemption was not available and since the appellants have sold the goods to local weavers they must have recovered applicable duty. 22. As regards penalty, we find that neither show cause notice nor the impugned order brings out any material to show that Shri Vinod Deora, Manag ing Director and Shri Suresh Deora, Director were in any way involved in the illegal activity or have physically dealt with the goods which were liable to confiscation. The penalty im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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