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TMI Blog2015 (5) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... case are that on 22th September, 1994 Unity Agro Tech Industries Ltd., (100% EOU) was granted industrial license issued by Ministry of Industries and Company Affairs, Department of Industrial Development, Secretariat of Industrial approvals for setting up a EOU unit for manufacture of Cut Flowers- Rose, with annual capacity of 59,50,000 numbers (stems), subject to fulfillment of certain conditions namely:- (i) the entire production shall be exported for a period of 10 years or less from the date of commencement of commercial production, as may be specified by Government. (ii) Legal Undertaking- In this regard will be recruited by the undertaking. (iii) the value addition, shall be minimum 70% etc. Thereafter, Unity Agrotech Industries Ltd. (UAIL for short) imported duty-free capital goods in terms of exemption Notification No.13/81-Cus. dated 9th February, 1981 and also procured indigenous capital goods in terms of exemption Notification No.1/95-CE dated 04th January, 1995, for the purpose of in bond manufacture of exportable goods. Thereafter, UAIL executed legal agreement on 22nd May, 95 with the DDC, SEEPZ, Andheri, Mumbai after accepting the conditions given in the Industria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cherry Fashions Ltd. have taken over the total liabilities both secured and unsecured, income tax, sales tax, excise, electricity, book creditors, loans of UAIL from the date of commencement till date. As Cherry Fashions Ltd. have been holding the controlling shares and management of UAIL, they were liable to pay off any liability accrued and/or to be accrued. Whether it is of statutory/ ordinary major including contingent liabilities. It was also put on record that in the EGM held in the month of May 97, directors of UAIL have relinquished all rights, whatsoever, they had as promoter and the director of the company-UAIL, further reiterated that they disown any liability or claim arising in respect of UAIL. Vide letter dated 04th June 1997, Cherry Fashions Ltd. med the Assistant Commissioner of Central Excise Raigad Division, stating that they have taken over the management and control of UAIL- (100% EOU) registered with your Division and situated at Village-Nilaj, Taluka Mangaon, District-Raigad. Further, stating that since M/s Cherry Fashions Ltd. is in possession and control of the (100% EOU) since they have taken over with all assets and liabilities of the same, they hereby di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It further appeared that the duty-free imported goods and indigenous goods were procured by UAIL under bond which were subsequently, improperly removed and production for export have not commenced and no ex-bonding has taken place in respect of duty-free goods, the limitation under Section 28 (1) of the Customs Act and Section 11 A of the Central Excise Act would not be applicable for the demands in respect of the duty-free goods procured. It also appeared that as informed by the joint DC, SEEPZ, vide letter dated 29.08.2001, that LOP was valid up to 08th May, 98 and the unit did not apply for extension of the validity of LOP. It was also intimated Chat the unit has neither intimated date of commencement of production of exports nor submitted APRs/ QPRs and hence the unit have not fulfilled the export obligation and Net Foreign Exchange earnings (NFEP). 5. The show cause notice was adjudicated on contest by the Order-in-Original dated 10.05.2004, whereas, it was ex-parte against the company-UAIL. The appellant herein had stated that he had resigned from the post of Chairman & Managing Director in June, 1997 and the Capital goods as well as all assets of the company UAIL where take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II of the Act. Thus, the order of penalty is vitiated and fit to be set aside. The learned counsel further urges that. the present appellant have not clone anything clandestinely in withdrawing from the 100% EOU-UAIL by selling his shares to Cherry Fashion Ltd. along with other shareholder/promoters. It is admitted fact that this appellant had given adequate information, proper intimation of such transfers to the appropriate authority under the Customs Act as well as the Central Excise Act and also to the office of the Development Commissioner, SEEPZ. It is also not the case of revenue that during the time the present appellant was in command or In-charge of the affairs of UAIL there was any clandestine removal from the bonded premises, of Capital goods. The learned counsel further urges that all the facts were in the knowledge of the revenue officers or the proper officer, which is evident from the intervener application filed in the year 2005, before the DRT at Mumbai in RP No.310/2002 Union Bank of India Vs Unity Agro Tech Industries Ltd. (now Cherry Fashion Ltd.) wherein the Commissioner of Customs and Central excise, have acknowledged the knowledge of facts of taking over of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e found to have been exercised on irrational and ambiguous basis, the same is liable to be quashed. 7. The learned AR for the revenue have relied on the Impugned order. 8. Having considered the rival contentions, I find that it is an admitted fact that there was no activity of clandestine removal of the Capital goods lying under bond in the bonded premises till February, 1997 or May 1997, when the present appellant and the other promoters sold their equity in UAIL to Cherry Fashions Ltd. under proper permission granted by SEBI and also proper intimation was given to the revenue. It is admitted fact that the alleged clandestine clearance from the bonded premises have taken much thereafter for which the erstwhile management of UAIL including the present appellant, cannot be held liable to any penalty under Section 112 of the Act. I also find that the penalty is bad, as neither in the show cause notice, any particular clause of Section 112 have been invoked nor-in the impugned order. The learned Commissioner have not mentioned any Clause of Section 112, under which the penalty is imposed. As such the order of penalty is vitiated and is bad in law. 9. Accordingly, I allow this appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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