2008 (1) TMI 794 - AT - Central Excise

Summary

Issues:
Prayer to dispense with pre-deposits under Rule 209A of Central Excise Rules due to receipt of texturised yarn from a 100% EOU without duty payment.
Imposition of customs duty and penalty on appellants as recipients of yarn cleared by 100% EOU without duty payment.

Analysis:
The Tribunal considered the prayer to dispense with pre-deposits of Rs. 1,50,000 and Rs. 50,000 under Rule 209A of the Central Excise Rules due to the appellant being recipients of texturised yarn from a 100% EOU that cleared the same without payment of duty. The Tribunal noted that in a previous order, the adjudicating authority had confirmed customs duty against the 100% EOU and penalized the appellants under Section 112(b) of the Customs Act for receiving the yarn without duty payment. However, the Tribunal had set aside the customs duty order, stating that customs duty was not the appropriate duty to be demanded from the 100% EOU. Regarding the appellants' penal liability, the Tribunal found that there was no evidence to show that the appellants were aware of the non-duty paid nature of the yarn or the 100% EOU's obligation to export the yarn instead of selling it domestically. The Tribunal held that the penal provisions of the Customs Act were not applicable in this case, as the issue pertained to goods manufactured in India attracting excise duty, not customs duty.

The Tribunal concluded that since there was no evidence of the appellants' knowledge regarding the duty status of the yarn or the 100% EOU's obligations, the penal liability could not be established against the appellants. Therefore, the Tribunal set aside the penalty imposed on the appellants, as it was based on the same facts that had previously been deemed insufficient to establish liability. The Tribunal emphasized that penalizing the appellants again under a different Act for the same set of facts was contrary to legal principles. The Tribunal's decision to overturn the penalty and dismiss the stay petitions was based on the lack of evidence linking the appellants to the duty non-payment by the 100% EOU.

In summary, the Tribunal ruled in favor of the appellants, setting aside the penalty imposed on them for receiving texturised yarn from a 100% EOU without duty payment. The decision was based on the lack of evidence demonstrating the appellants' knowledge of the duty status of the yarn or the 100% EOU's obligations, leading to the conclusion that penal liability could not be established against the appellants.