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2009 (9) TMI 824 - AT - Central Excise
Issues involved: Non-prosecution of appeal by M/s. I.C. Textiles and imposition of penalties on other appellants u/s Rule 209A of CER, 1944/Rule 26 of CER 2001/2002.
Non-prosecution of M/s. I.C. Textiles' appeal: The appellant, M/s. I.C. Textiles, failed to appear on multiple occasions despite being given opportunities, leading to the dismissal of their appeal for non-prosecution. Other appellants, who were purchasers of yarn from M/s. I.C. Textiles, challenged the penalties imposed on them. Imposition of penalties on other appellants: The Commissioner imposed penalties on the purchasers of yarn for acquiring goods without payment of duty from M/s. I.C. Textiles. The Commissioner found that the purchasers were aware of the rules regarding duty-free purchases from a 100% EOU but still acquired the goods without payment of duty. The Commissioner held the purchasers liable for personal penalties u/s Rule 209A of CER, 1944/Rule 26 of CER, 2001/2002. Appellants' contentions and decision: The appellants argued that they procured yarn from M/s. I.C. Textiles in compliance with statutory provisions and that there was no connivance with the officers. They contended that the invoices clearly displayed "100% EOU," indicating no intention to conceal information. The appellants believed the goods were free from encumbrances and were used in the manufacture of export goods. The Tribunal found no merit in the Revenue's objections, noting that there was no obligation to disclose the supplier's EOU status. The Tribunal also agreed that the situation was revenue-neutral, as the goods were used in export and duty could be refunded. Relying on precedent decisions, the Tribunal set aside the penalties imposed on the other appellants u/s Rule 26/Rule 209A, allowing their appeals. Conclusion: The penalties imposed on the purchasers of yarn, except M/s. I.C. Textiles, were set aside, and their appeals were allowed based on the findings that there was no intention to evade duty and the situation was revenue-neutral.
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