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TMI Blog2014 (11) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs and raw materials by availing benefits of Notification No. 31/95/CE. On specific inclusion the main appellant had misutilised the benefit that were granted to 100% EOU in as much that they had shown clearances of goods against fake advance license and advance release orders to factious non-existing firms, diverted the goods in domestic market without payment of duty and indicated such clearances against fake advance license and advance release orders. 3. After carrying out detailed investigation and recording various statements, lower authorities issued show cause notice on the appellant demanding customs duty and central excise duty foregone by the Revenue under Notification53/97-CUS and 1/95-CE, sought interest amd also sought to impose penalties on the main appellant as well as other appellants. All the appellants contested the show cause notice on merits before the Adjudicating Authorities except Shri Mulchand Bhanvarlal Saran. The Adjudicating Authority after following the due process of law, did not agree with the contentions raised and confirmed the demand raised alongwith interest imposed penalties on all the appellants. 4. Ld Counsel appearing for all the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from any person by way of enforcement of B 17 Bond executed by that person,. B-17 Bond executed by a person at the time of clearance of imported goods as condition for total exemption from payment of Customs Duty in terms of the provisions laid down under notification no. 59/97-cus dated 3.6.1997 is the importers covenant to pay duty in the event of breach of mandatory post import conditions of such notification. When such post import condition is violated of the notification by the importer the duty becomes liveable ipso facto and the provision of Section 28 of the Act get attracted for collection of such duty. Section 28 of the Act is the only provision for enforcing the conditions of B 17 Bond executed by the importer. f) Condition No.10 of B 17 Bond is attracted when raw material imported duty free was clandestinely removed in the factory of 100% EOU in the manufacture of an article for export. B 17 Bond executed by the appellant contains provisions which indicate that Section 28 of the Act could be invoked for demand and recovery of duty. Condition No 14(3) of the B-17 Bond authorise the department to recover duty due from 100% EOU in the manner laid down in sub section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned SCN dated .12.2003 the demand and recovery of Central Excise Duties is proposed to be made on the ground of violation of the condition of the Notification No 1/95-CE dated 4.1.1995 in so far as it relates to the procurement of raw material namely Polyester Twisted Yarn without payment of Central Excise Duties in term of the proviso to Section 3(1) of Central Excise Act, 1944 relating to the raw material supplied by other 100% EOUs and received by 100% EOU of the appellant and in terms of the provisions specified under section 3(1) of Central Excise Act, 1944, relating to the raw material supplied by the indigenous unit (DTA unit) and received by the 100% EOU of the appellant. k) The department should have issued the impugned SCN dated 3.12.2003 to demand/recover the amount of Central Excise duties forgone on the indigenously poured raw material by invoking the provisions as laid down under Section 11(A) of the Central Excise Act, 1944 read with Condition No. 2, 10 and 14(3) of B 17 Bond dated 21.9.1999 and the demand of Central Excise duties can be made by issuing the show cause notice in the manner as prescribed under Section 11A of the Central Excise Act, 1944. l) B 17 B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision for enforcing the conditions of B 17 Bond executed by the 100% EOU of the appellant. o) Condition No. 10 of B 17 Bond is attracted when indigenously procured duty free raw materials was clandestinely removed without payment of central Excise duty instead of being used in the factory of 100% EOU in the manufacture of an articles for export. B 17 Bond executed by the Appellant contains provisions which indicate that Section 11A of the Act could be invoked for demand and recovery of duty. Condition No 14(3) of the B17 Bond authorise the department to recover duty due from 100% EOU in the manner laid down in sub section (1) of section 142 of the Customs Act 1962. A conjoint reading of condition No 2 and 10 read with condition No 14 (3) of B 17 Bonds would indicate that Central Excise duty plus interest leviable could be demanded from the appellant through a show cause notice issued under Section 11A of the Act. p) The department should have issued the impugned SCN dated 3.12.2003 to the appellant under section 11A of the Act demanding Central Excise duty on the indigenously procured raw materials as per condition No.2 of B 17 Bond. In that case Commissioner of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held in the case of Sterlite Opticals Technolog9ies Ltd (Supra) which lend support to the contention of appellant as submitted herein above. s) In case of Molex (I) Ltd vs Commnr of Cus Bang. Reported in 2012(275) ELT.607 (tri. Bang.). It is held by the appellate Tribunal that Section 28 of Cus. Act 1962 is the only provision for collection of from a person through a process of adjudication amount of Cus. Duty which has not been levied or erroneously refunded. It is ruled in the above cited case that SCN issued under Rule 8 of Cus Rules 1996 import of goods at concessional rate of duty is no valid since the same having been issued without jurisdiction and thus found to be defective in law and therefore not sustainable in law. 5. In addition to the above, it is his submission that penalty imposed on Shri Mulchand Bhanvarlal Saran, authorised signatory of the main appellant is incorrect as he has not been put to notice, to substantiate his claim he would take us through the entire show cause notice and submit that though statements of Saran has been relied upon on various places, he has not been put to notice anywhere in the show cause notice. Hence penalty imposed on him needs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh Makkar@Billa and Shri Shankarlal Agarwal@R K Gupa are hereby called upon to show cause to the Commissioner, Central Excise ands Customs, Surat 1 having office at New Central Excise Building Opp Gandhi Baug Chowk, Surat as to why : Penalty should no be imposed on each of them separately under Section 112 of Customs Act 1962 and Rule 209 A of central Excise Rules 1944. 9.1 From the above reproduced portion of show cause notice, it can be seen that there is mention by name of every person, but does not indicate that the said show cause notice has been issued to Shri Mulchand Bhanvarlal Saran for imposition of penalty. In the absence of any show cause notice, we are of the view that the impugned order to the extent it impose penalty on Shri Mulchand Bhanvarlal Saran is in violation of the settled law and hence is liable to be set aside and we do so. 10. Coming to the appeals filed by the other appellants, we find the main appellant of Skyron Overseas Industries has contested duty liability mainly on the ground that the Adjudicating Authority has incorrectly invoked confirmation demand for the demand of excise duty; that the demand of customs duty is also incorrect and has feebl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit that he had prepared the said invoices of M/s Mairaj Exports as their unit was facing labour as well as financial problems. The raw material (imported and indigenous) were sold out in as such conditions, in the open market on cash. All these facts are supporting corroborative evidence which proves that there no transaction on the Ad. Licence /ARO and the said unit diverted the raw material; as such in the open domestic market. I have also noted that the unit after their confession of the offence have paid voluntarily Rs. 12 lakhs in piece meal through various TR-6 Challans as enumerate in Para 12 of the show cause notice. 12. It can be seen from the above reproduced paragraph, the Adjudicating Authority has bought on record the complicity of the main appellant in defrauding government of its legitimate revenue. In view of the foregoing, we hold that M/s Skyron Overseas Industries the main appellant herein has not made out any case and the appeals are devoid of any merits. The appeals are rejected. 13. As regards the penalties imposed on Shri Sunil G Somani, we find that the Adjudicating Authority has imposed penalties on him on the ground that he being authorised signatory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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