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2019 (6) TMI 360 - AT - Central Excise100% EOU - applicability of various Rules to the 100% EOU - confiscation to goods under Rule 209 - confiscation of Land, Building, Plant and Machinery under Rule 173 Q(2) is not applicable - HELD THAT - Ld. Counsel has raised an issue heavily that Rule 53,209A and 1733Q of Central Excise Act, 1994 are not applicable in the case of 100% EOU. However, the applicability of this legal provision to 100 % EOU has not been examined by the adjudicating authority. Since this is very important legal issue raised by the appellant it is necessary, the same should be answered by the adjudicating authority. Matter remanded back to the adjudicating authority for passing a fresh order on all issues including the fresh issue of applicability of various Rules to the 100% EOU - appeal allowed by way of remand.
Issues:
1. Confiscation of goods and imposition of penalties on a 100% EOU for non-entry of goods in statutory records. 2. Applicability of Rule 209, 209A, and 173Q of the Central Excise Act, 1994 to a 100% EOU. Issue 1: Confiscation of Goods and Imposition of Penalties The case involved a 100% EOU engaged in the manufacture of Polyester Filament Yarn. Central Excise Officers conducted a search at the factory premises and seized various goods worth a significant amount. The department alleged that the goods were not entered in statutory records to evade central excise duty. The adjudication order resulted in the confiscation of goods and imposition of penalties, including a redemption fine and penalties on the company's director and manager. The appellant challenged this order, arguing that the confiscation under Rule 209 and Rule 173Q(2) was not applicable to a 100% EOU. The appellant contended that the imported raw materials were legally imported and bonded in the EOU, thus not liable for confiscation. Additionally, the appellant claimed that specific details of the offense under Rule 209 were not mentioned in the show-cause notice. The appellant cited various judgments to support their arguments. Issue 2: Applicability of Legal Provisions to 100% EOU The appellant raised a crucial legal issue regarding the applicability of Rule 53, Rule 209A, and Rule 173Q of the Central Excise Act, 1994 to a 100% EOU. The appellant argued that these rules were not applicable to EOUs and that the adjudicating authority had not examined this aspect. The appellate tribunal acknowledged the significance of this legal issue and remanded the matter back to the adjudicating authority for a fresh decision, specifically directing a reevaluation of the applicability of the mentioned rules to a 100% EOU. The tribunal emphasized the need for a thorough examination of this legal provision in the context of EOUs, indicating that a proper determination was essential before any further action or penalties could be imposed. In conclusion, the appellate tribunal set aside the impugned order and remanded the case to the adjudicating authority for a fresh decision on all issues, including the critical matter of the applicability of Rule 53, Rule 209A, and Rule 173Q to a 100% EOU. The decision highlighted the importance of a detailed examination of legal provisions concerning EOUs before any confiscation or penalties could be imposed, ensuring a fair and legally sound outcome.
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