2017 (11) TMI 1517 - AT - Central Excise

100% EOU - Penalty u/s 112(a) - violations of customs provisions - case against the EOU is that they have not undertaken any manufacture as mandated in the permission nor they have followed the procedure for getting the goods manufactured from the job workers - Held that - the original authority analyzed various corroborative evidences and also detailed depositions made by the appellant himself during the investigation. A cumulative reading of the appraisal of evidences indicates that the findings of the original authority could not be refuted with any force by the appellant - considering the offence, the penalty amount is reduced - appeal allowed in part.

Summary

Issues:
1. Imposition of penalty under section 112(a) of the Customs Act, 1962 on the appellant.

Analysis:
The case involved an appeal against the order of the Commissioner of Central Excise, Chennai III, dated 31.12.2008. The appellant, a party involved in the manufacture and export of readymade garments under an approved 100% EOU, was accused of violating provisions of the Customs Act, 1962, resulting in loss of customs duty. The main noticee, M/s. Hi-Bright Apparels India Pvt. Ltd., faced demands of customs duty, confiscation of goods, and penalties. The present appeal specifically challenged the imposition of a penalty of &8377; 7.50 lakhs on the appellant under section 112(a) for abetting violations by the main noticee.

The appellant's counsel argued that the appellant merely rented out premises to the main noticee and was not directly involved in their activities. It was contended that the appellant was unaware of the legal obligations of the main noticee as an EOU and in engaging job workers. The appellant sought a waiver of the penalty, claiming lack of involvement and knowledge.

On the other hand, the Revenue Officer supported the findings of the impugned order, asserting that the appellant's role was well-established during the investigation. The Officer highlighted that the appellant's statements and actions corroborated his involvement in the violations, justifying the penalty under section 112(a.

The Tribunal examined the evidence and arguments presented by both sides. The impugned order detailed the appellant's involvement in procuring export orders, production activities, and dealings with job workers, leading to violations of customs regulations. The Tribunal noted that the original authority's findings were supported by the appellant's own statements and actions during the investigation.

Ultimately, the Tribunal upheld the imposition of the penalty under section 112(a but reduced the amount from &8377; 7.50 lakhs to &8377; 2,00,000. The Tribunal considered the appellant's role independently from the main noticee's appeal, which was dismissed for non-compliance. The appeal was dismissed, except for the modification of the penalty amount, based on the evidence and findings presented in the case.

In conclusion, the Tribunal affirmed the penalty under section 112(a on the appellant for his involvement in the customs duty violations, albeit reducing the penalty amount. The decision was based on a thorough analysis of the evidence and arguments presented by both parties.