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TMI Blog2019 (11) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... director of Appellant Unit in whose favour the CT-3 certificates were issued. Shri Rashid Sayyed, the partner of M/s Al-Amin in his statement stated that one Shri Bilal Latif Memon used to supply readymade cheap goods after purchasing from open market to M/s Sunshine and M/s Al- Amin through the tempos of Shri Akbar Tempowala. No goods were received from M/s Laurel. The EOUs used to do minor jobs of sewing and packing and export the goods. It was found that all the goods were brought by these firms from market. No physical evidence of transportation of finished goods could be shown by M/s Laurel. This clearly shows that M/s Laurel instead of use of duty free raw material in manufacture of finished goods to be exported, has sold the raw material in open market. The Appellant has challenged the impugned order also on ground that no cross examination of panch witnesses and other witnesses was provided. We find that the repeated statements of the concerned persons clearly shows that the raw material was cleared by the Unit in open market and false receipt of goods was shown by the consignee unit. Even the goods seized from consignee M/s Al-Amin could not have been manufactured f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods were shown to have supplied to M/s Al-Amin Exports and M/s Sunshine Exports both 100 % EOUs who were showing procurement of goods i.e Dyed fabrics/ Transfer Print Fabrics from Appellant assessee Unit under the cover of invoices/ AR-3s against CT -3 Certificate issued to them. However the consignee EOU Units instead did not receive any finished goods of M/s Laurel but were showing manufacturing activities so as to fulfil the export obligations and were exporting cheaper quality bought out items like scarves, dupattas etc. procured from the domestic market through Shri Bilal Latif Memon, proprietor of M/s Lazio Exports. It was found that no goods were received by Sunshine Overseas, Navsari and M/s Al- Amin Exports but they were receiving premium of ₹ 4 5 per meter from Shri Mahendra Sancheti, executive director of Laurel Apparel on account of showing receipt of processed goods from M/s Laurel. It was alleged in show cause notice that raw materials procured against CT-3s from EOUs and DTA/ imported against Annexures under the EOU Scheme by the Unit was infact diverted into local market for sale in cash by resorting to manipulation of records by showing the production of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... free raw material which was not available for confiscation in terms of Section 111 (d), 111 (j) and 111 (o) of Customs Act, 1962. In respect of indigenous raw materials, it was proposed to demand central excise duty of ₹ 2,35,49,645/- on 1494194.50 mtrs. of indigenously procured knitted/ woven Grey Fabrics in terms of proviso to section 11A (1) of Central Excise Act along with interest and to confiscate the goods so procured ; to impose penalty u/r 25 of the Central Excise Rules, 2002. Penalty was also proposed on M/s Al-Amin Exports M/s Singh Overseas, M/s Arya Dyeing and Printing Mills, M/s Pinkline and M/s Shivshakti Industries u/s 112 of the Customs Act, 1962 read with Rule 25 of Central Excise Rules, 2002 on ground that they have shown receipt of polyester printed fabrics, transfer print fabrics and embroidered fabrics from M/s Laurel Apparel without actual receipt. It was also proposed to impose penalty on Shri Mahendra Kumar Sancheti, Shri Ravindra Arya, director of Laurel Apparels u/s 112 of Customs Act read with Rule 26 of Central Excise Rules, 2002. 1.3 The demands and penalties as proposed in show cause notices were confirmed by the adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the adjudicating authority is bound by the decision of the tribunal or other judicial forums. In spite of the specific order of the tribunal and accepting the applicability of its precedent judgment- in case of Defiance clothing Co. 2008 (87) RLT 743, the adjudicating authority has unjustly entered into discussion and by relying upon some other judgment and inapplicable circular of the Board and has held that there is no need to have prior approval from the Development Commissioner. That the re-warehousing certificates were received by the Appellant duly countersigned by the Range Superintendents having jurisdiction over the receiving EOUs and when the SCN Adjudication order are issued to the 100% EOUs on the basis of receipt of the finished goods manufactured and cleared by the Appellant, the revenue cannot push aside the strong and statutory evidence. The Circular No. 579/16/2001 CX dt. 26.06.2001 specifies the particular procedure and fulfilment of same cannot be wished away without cogent reason. He relies upon order in case of National Impex Vs. CCE 2007 (213) ELT 429 (TRI). He takes us through the Invoices, CT-3, ARE-1s, D-3s etc annexed as documentary evidence of ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that the buyers/ brokers have categorically deposed that they had purchased the goods from Shri Mahendrakumar Sancheti. Their contention is not supported by any evidence that the material infact were supplied by M/s Bindal as claimed by them. The adjudicating authority did not consider that from the recorded statements of buyers it is apparent that none of them has stated that they have purchased goods from Appellant Company. They gave the name of Shri Mahendra Bhai Sancheti who is also the director in M/s Bindal who was the seller and who acted through its director Shri Mahendra bhai. This fact was supported by the evidence of sales invoice, goods inventory and payment details etc. in records of M/s Bindal. The adjudicating authority has erred by rejecting the Appellant s submission that out of 20 vehicles, only two vehicles were reported to be incapable of carrying the load and that even the two impugned vehicles were alleged to be incapable because of some writing error with regard to registration number of these two vehicles. The adjudicating authority has held that Unit did not have bleaching facility which is required for manufacture of transfer print fabric. He fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g visit to the factory of M/s Al-Amin it was found that the machines were not capable of being run except one sewing machine and one pleating machine and 65000 pcs of dyed and printed scarf were supplied by Shri Bilal Latif Memon after purchasing from open market. No legal document was found to show the purchase of such goods. Shri Rashid Sayyed, Partner of M/s Sunshine also stated that entire operation of M/s Sunshine was looked after by Shri Irfan Rasul Gulam and Haroon Razak Chhaya. In factory there was small stock of chindis and cut-pieces sent by Shri Bilal Latif Memon which had no relation with CT-3 issued by them. Shri Rashid in his statement dt. 21.06.2003 also stated that fabrics was purchased by them from Surat and after cutting and stitching the dupattas and scarves were exported. Shri Kaushik Majumdar, authorised signatory of M/s Sunshine in his statement dt, 21.06.2003 stated that the partners of unit were for name sake and the work was looked after by Shri Irfan Rasul Sayyed and Shri Haroon Razaak Chhaya. Shri Irfan Rasul Sayyed and Shri Haroon Razaak Chhaya in their statement dt. 21.06.2003 stated that no raw materials was received against CT-3 from EOUs and they wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that he had given export orders for M/s Al-Amin and M/s Sunshine and bought made ups and readymade garments for them for enabling third party exports. The statement of tempo driver who transported goods from Surat godown of Shri Latif to factory of M/s M/s Al-Amin and M/s Sunshine was recorded wherein he stated that he has transported goods three times during the month of June, 2003. Shri Rashid Ahmed Sayyed, Partner of M/s Sunshine Overseas in his statement dt. 30.07.2003 also stated that the contents of his and Kaushik Majumdar retraction affidavits were wrong and were filed on direction of Shri Haroon Razzak Chhaya and Shri Irfan R. Saiyed. Shri Haroon Razak Chhaya in his statement dt. 30.07.2003 also stated that the retraction affidavits were wrongly filed and were false. In his statement dt. 20.08.2003, Shri Bilal Latif Memon stated that the goods seized from M/s Al-Amin were 65000 pcs of printed scarves were supplied by him and he was supplying such goods earlier also. The goods contained in the said container were made out of cheaper quality of fabrics namely cut pieces and were not of uniform sizes; that these goods were not made out of regular fabrics but were purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be shown by M/s Laurel. This clearly shows that M/s Laurel instead of use of duty free raw material in manufacture of finished goods to be exported, has sold the raw material in open market. 5. As regard the contention of the Appellant that the adjudication proceedings should have been initiated only after receiving clearance from the Development Commissioner as per the earlier Tribunal remand Order based upon judgment in case of Defiance Clothing Co. 2008 (87) RLT 743 (CESTAT), we find that the adjudicating authority has elaborately dealt with the above aspect. We are in agreement with his view that the reference to the Development Commissioner is required to be made only where any interpretation of policy/ procedure is required. However the present case pertains to illegal diversion of duty free imported and indigenously procured goods which has got no concern with the Development Commissioner. Hence in such case the impugned order passed by the adjudicating authority is absolutely correct. 6. The Appellant has challenged the impugned order also on ground that no cross examination of panch witnesses and other witnesses was provided. We find that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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