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TMI Blog2015 (9) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... ne - Penalty under Rule 26 - Held that:- while at the time of officers' visit to the factory on 24.11.2004, the RG-I register was not there but the same was produced on 29.11.2004 - imposition of fine of ₹ 50,000/- is on a much higher side, when duty involved on the goods is only ₹ 38,000/-. In view of this, the redemption fine is reduced - penalty under Rule 26 is not sustainable. - Decided partly in favour of assessee. - Excise Appeals Nos. E/1585 and 1584/2006-EX(DB) - FINAL ORDER NOS. 51985-51986/2015 - Dated:- 4-6-2015 - Rakesh Kumar, Member (T) And Sulekha Beevi C S, Member (J),JJ. For the Appellant : Shri Rakesh Kumar, Member (T) For the Respondent : Shri M S Negi, DR ORDER Per: Rakesh Kumar: The facts leading to filing of these appeals are, in brief, as under:- 1.1 The appellant company, whose Director is Shri N.K. Indoria was registered under Rule 12 B of the Central Excise Rules, 2002. In terms of Rule 12 B of the Central Excise Rules, 2002, notwithstanding with anything contained in these rules, every person not being an export-oriented unit or a unit located in special economic zone, who gets yarns or fabrics produced or manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job worker's premises, the duty would be chargeable. 1.2 The unit of the appellant was visited by the officers on 24.11.2004 and at that time though there was a stock of processed fabrics valued at ₹ 5,95,136/-, there were no records. On being asked, the appellant explained that the records had been sent to the Corporate office for computerization. Subsequently, however, 29.11.2004, the records were produced. Since on 24.11.2004 the appellant could not produce any records, the processed fabrics found in stock were seized. The Department was of the view that since these goods were not accounted for in terms of the relevant provisions of the Central Excise Rules, the same would be liable for confiscation. 1.3 In view of the above, a show cause notice was issued for demand of duty amounting to ₹ 19,41,761/- in respect of the fabrics cleared for export from the job worker's premises during period from 17.1.2004 to 26.06.2004 along with interest on it under Section 11 AC and also for imposition of penalty under Section 11 AC. The same show cause notice also sought confiscation of the seized goods valued at ₹ 5,95,136/-. 1.4 The above show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port from the premises of the job worker, he shall pay duty on such excisable goods and prepare an invoice', that in this sub-rule (2), there is no prohibition that such a person cannot export the goods through job worker under Rule 19 of the Rules and since that the appellant registered under Rule 12 B was to be treated as a manufacturer, the provisions of Rule 19 would be applicable to him, that when the goods have been exported out of India under bond in terms of the provisions of Rule 19 by following the procedure prescribed under this rule and fulfilling its conditions, the benefit of the duty free clearance cannot be denied. Shri Sharma, therefore, pleaded that duty demand of ₹ 19,41,761/- is without any basis and is not sustainable. With regard to confiscation of the goods valued at about ₹ 5,95,136/-, Shri Sharma pleaded that the goods had been accounted for in the account being mentioned in terms of Rule 10 of the Central Excise Rules and at the time of the officers' visit to their premises, RG-I register had been sent to Head Office for computerization and subsequently, the stock account maintained by the appellant had been produced on 29.11.2004 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this stand of the Department is not correct, as in terms of the Board's Circular dated 28.07.2004, the person registered under Rule 12 B, even though not undertaking any manufacturing activity on his own and not having a factory, should be treated as a manufacturer for all practical purposes. In terms of Rule 19 of the Central Excise Rules, any excisable goods may be exported without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, as may be approved by the Commissioner under this Rule. Thus a person whether a manufacturer or a trader can export the goods under bond under Rule 19 from the factory where the same have been manufactured. Since in the present case, there is no dispute that the necessary conditions for export under bond without payment of duty under Rule 19 have been satisfied and the prescribed procedure had been followed, the Department's stand that the duty would be chargeable on the clearance made by the appellant for export from job worker's premises is not correct. In view of this, the impugned order upholding the duty demand of ₹ 19,41,761/- along with interest and imposing penalty of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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