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TMI Blog2015 (9) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial, which was received by the main noticee as per procedure prescribed. In such situation, the imposition of penalty on the appellant is unjustified. The penalty imposed on the appellant is not warranted. Accordingly, the penalty imposed on the appellant is set aside. - Appeal No. E/55/2009-SM - Order No. A/12350 / 2014 - Dated:- 31-12-2014 - P. K. Das, Member (J),J. For the Appellant : Shri Hadik Modh, Adv. For the Respondent : Shri Alok Srivastava, Dy Commissioner (AR) ORDER Per: P K Das: 1. The appellant filed this appeal against imposition of penalty of ₹ 25 lakhs under Rule 26 of Central Excise Rules, 2002. 2. The relevant facts of the case, in brief, are that one M/s Monarch Creative, a 100% E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the raw material to the main noticee, under CT3 certificate, after observance of the procedure as prescribed under Central Excise Rules. The adjudicating authority had not disputed the receipt of the goods by the main noticee. He drew the attention of the Bench to the relevant portion of the adjudication order. He submits that the appellant has no involvement in the alleged diversion of the goods by the main noticee and therefore, imposition of penalty on the appellant under Rule 26 of Central Excise Rules 2002 is unwarranted. He relied upon the following decisions:- i) M/s Sunshine Overseas Vs CCE 2011 (268) ELT 374 (Tri-Ahmd) ii) M/s Vikram Enterprise Vs CC Kandla 2008 (226) ELT 437 (Tri-Ahmd) iii) Sarala Polyester Ltd Vs CCE 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsibility for payment of duty shall be upon the consignor if the goods dispatched for warehousing or re-warehousing are not received in the warehouse. I find from the Raw Material Account Register;. CT3 intimation, ARE3 and various statements of Shri Abhay Panchmatia, Proprietor of the unit, that the unit had received the goods in their warehouse. I find, that the duty is demanded from the noticee for having diverted the duty free procured goods in local market, which have been received by the unit from the consignors and diverted against the terms and conditions of Notification No.22/2003-CE,. dt.31.03.2003, EXIM Policy as amended and in terms of conditions of B-17 Bond. Therefore, recovery of duty under Rule 20 (4) of Central Excise Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act 1944 stated that they have received their raw material, viz. Polyester Knitted Grey Fabrics of 460 GSM from M/s Nandan Synthetics Pvt.Ltd. (100% EOU), Navsari. 7. It is seen from the above finding that the raw materials supplied by the appellant were received by the main noticee who diverted the goods unlawfully and demand was raised on them. The adjudicating authority observed that the appellant has played a very crucial role in the offence committed by the main noticee. The learned Authorised Representative mainly contended that the appellant was not aware of the transportation of the goods, which was refuted by the ld.Advocate in rejoinder. In my considered view and on perusal of the findings of the adjudicating authority, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Commissioner, which only described the product to be supplied as 100% Polyester Dyed, Woven Fabrics GSM between 200 to 300 . Undisputedly, the said fabrics have been supplied by the assessee. There is no requirement in the said Annexure as regards length of fabrics to be supplied. As such, supply of the fabrics in length 22 to 25 yards cannot be held to be in contravention of said authorization. There is no other evidence on record to reflect upon the knowledge of appellant as regards the fact that recipient of the fabrics would dispose off the same In the local market instead of further processing. There is no evidence to snow that the appellant helped the recipient for such diversion. 6. In such a scenario, we find no justification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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