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2016 (11) TMI 474 - CESTAT NEW DELHI

2016 (11) TMI 474 - CESTAT NEW DELHI - TMI - 100% EOU - clandestine removal - shortage of materials - goods found short in their premises were transferred to the present appellant s premises on account of same being moth infected, the excess found in the present appellants case, cannot be held as liable to confiscation - Held that: - The shortages found during the relevant period are in respect of yarn and polywool etc. which are to the tune of small fractional percentage of the total stock. It .....

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firming the demand of duty on the finding of clandestine removal. Accordingly, the impugned order is set aside and appeal allowed with consequential relief to the appellant. - Excise Appeal No. 727 of 2006 - ORDER No. FO/ 54764 /2016-(SM) - Dated:- 4-11-2016 - Hon'ble Ms. Archana Wadhwa, Member (Judicial) Shri Prateek, with Shri Jatin Singhal, Advocates for the Appellants Shri R K Mishra, AR for the Respondent ORDER Per Ms. Archana Wadhwa As per facts on record, the appellant is engaged in t .....

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of penalty to the same extent. The excess found goods stand confiscated with an option to redeem the same on payment of Redemption Fine of ₹ 25 lakh. 2. It is also seen that apart from the present appellant located at Plot No. 923-945, the other units of the same appellant like Silk division, a DTA unit; Uniworth Wool division stock division, tying a 100% EOU were also operating. It is seen simultaneous search was also conducted in the premises of Uniworth wool division a100% EOU and shor .....

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isputed that the factory of UL and the factory of UTL, both 100% EOUs, are located in the same compound. In this appeal, we are concerned with the alleged shortage in the factory of UL which was detected in the course of stock taking done from 13.06.2000 to 16.06.2000. According to the Department, there was shortage of 73.904 MTs. in the stock of various yarns and shortage of 1.603 MTs. in the stock of wool waste. The allegation of the Department is that this quantity of yarn and waste has been .....

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ad been found and this fact had been intimated to the Department under the appellant s letter dated 5.4.2000 and it had also been stated by Shri D.K. Kothari, General Manager in his statement dated 16.06.2000. 7. While in the factory of UL shortage of 73.904 MTs. had been found, in the factory of UTL there was excess stock of 73.904 MTs. of mixed woollen yarn and as such, we are of the view that the alleged shortage in the factory of UL matches with the excess found in the factory of UTL. We als .....

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ot disputed. It is also seen that on 16.06.2000, the statement of Shri D.K. Kothari, General Manager had been recorded under Section 14 of the Central Excise Act, 1944 and on being questioned about shortage, had stated that this yarn has been shifted to another godown, as the yarn was damaged and moth eaten and as such, it is not the shortage. We find that this statement of Shri D.K. Kothari has neither been relied upon in the show cause notice nor the appellant had been supplied a copy of the s .....

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sioner acknowledges that such a letter had been received, he has observed that this was only a request for seeking of permission and as such, no permission has been granted. We do not accept this conclusion as once the letter regarding shifting of about 45 MTs of yarn to the godown of UTL had been received by the Assistant Commissioner, he should have responded as to whether he allows the shifting or not. We also find that the Commissioner in para 13 of his order has acknowledged that both the u .....

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imposition of penalty on that count is not sustainable. 4. Inasmuch as the Tribunal has already accepted the stand of M/s. Uniworth Ltd. that the goods found short in their premises were transferred to the present appellant s premises on account of same being moth infected, the excess found in the present appellants case, cannot be held as liable to confiscation. Accordingly, the order relating to confiscation of the excess found goods is set aside. 5. As regards the material found short in the .....

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