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TMI Blog2008 (2) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner vide which he has confirmed the duties and imposed penalties of varying amounts as detailed below: Sl. No. Name of the Party Duty (Rs.) Penalty (Rs.) 1 M/s Hytaisun Magnetic Ltd. 1,09,875 3,58,93,669 74,05,443 43,373 15,18,671 3,73,817 15,18,671 4,38,00,113 9,06,63,632 5,00,00,000 10,00,000 2 Shri B.A. Patel 3,00,00,000 3 Shri Snehal B. Patel 2,00,00,000 4 Shri Vishnu S. Patel 50,00,000 5 M/s Reliance Indus.Ltd. 1,00,00,000 6 Shri S.K. Ray 1,00,00,000 7 M/s L.G. Polymers (I) Ltd. 25,00,000 8 M/s Gujarat Carbon Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -3 certificate was not put to the use for which the same was procured, the liability to pay duty will rest upon the manufacturer. As such, learned advocate had made a prayer that it is not the responsibility of M/s HML to pay the differential duty in respect of goods in question, in as much as the manufacturer of the goods is liable to pay the duty for non-compliance of Rule 156B as modified Rule 173N in case of non-receipt of proper evidence of re-warehousing certificate received in the recipient's factory. 4. We do not find any force in the above contention of the learned advocate. Admittedly, the material has been procured against CT-3 certificate purported to have been issued by the supdtt. having jurisdiction over the appellant's factory. The said CT-3 certificate are admittedly invalid, the signature of the Supdtt. having been forged by the appellant themselves. We further note that the provisions of Notification No.1/95-CE exempt the goods for the purpose of manufacture, packaging etc. when brought into 100% EOU, subject to the condition that 100% EOU filed a bond with his jurisdictional Assistant Commissioner, for proper accountal of receipt, storage and util ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the goods thereafter there is no provision in law holding him responsible in ensuring that the goods ultimately reach the consignee's end. All that a manufacturer is to ensure is that the goods are sent out to a consignee who holds a valid L-6 license. Revenue in such a situation is secured by execution of the bond by the L-6 license holder for due accountal of the goods for the specified use and if he is not able to do that it is he alone who should be called upon to pay the duty dues unless it is shown that the consignor i.e. manufacturer is bound himself by a bond in this regard. Similar view was taken in the case of CCE, Madras Vs. Madras Radiators Pressings Ltd . -1994 (69) ELT 409 (Tri) and in the case of CCE, Mumbai-II Vs. Godrej Boyce Mfg. Co. Ltd . -2004 (172) ELT 477 (Tri-Mum.) 19. In view of the above, we hold that the duty has been rightly demanded from the appellants and we uphold the demand. 6. In the present case, not only goods were not put to proper use but same were also procured against forged CT-3 certificates and forged re-warehousing certificates were also issued. When the appellants are themselves indulging into fraud, their pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e will not act fatal to the proceeding. For the above proposition, reliance stands placed on the Tribunal's decision in case of (a) CCE, Pune Vs. Lanjekar Sales Corpn . 2007 (210) ELT 79 (Tri-Mumbai) (b) Supercom India Ltd. Vs. DGFT, Ministry of Finance - 2003 (160) ELT 69 (Del.) We agree with the above contention of the learned SDR. The appellant, having admittedly indulged in the clandestine activity, should not be allowed to go scot-free. In as much as we have already remanded the matter to the Commissioner for quantification of the demand, we would like him to adjudge the appellant's penal liability under the correct provision of law and to decide the quantum in consonance with the quantum of demand confirmed. 9. As regards penalties imposed upon Shri B.A. Patel, Shri Snehal Patel and Shri Vishnu Patel, it is seen that they were actively indulging in preparation of forged CT-3 certificates and re-warehousing certificates. They have taken law into their own hands had prepared the Supdtt.'s stamp and forged the signatures of the Supdtt. incharge. There are admissions on record, by way of their statements that the duty free indigenous raw mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he has introduced Shri Vora. It is well settled that the statement of the co-accused cannot be made the sole basis for penalizing the appellant. Further, the findings that Shri Ray used to instruct the depot at Hazira for delivery of consignments to HML and used to mention the name of the transporter for delivering the consignment, is not based on any material on record. We also note that introducing somebody with another person cannot itself be a ground for holding that the introducer has aided and abated in committing any offence. As such, we set aside the penalties imposed upon him also. 13. In a nut-shell, appeal of M/s HML, Shri B.A. Patel, Shri Snehal Patel, Shri Vishnu Patel stand remanded to the adjudicating authority for de-novo consideration, in the light of the observations made by us in the preceding paragraphs. The other small issues viz. confiscation etc. would also be considered afresh by him. All other appeals i.e. of M/s GSFC, M/s Gujarat Carbon Industries Ltd., M/s Reliance Industries Ltd., M/s L.G. Polymers (I) Ltd., and Shri S.K. Ray are allowed. 14. [Assent per: M. Veeraiyan, Member (Technical) - I agree with the order proposed by my l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fts to the supplying units for the materials sent by them and having sent forged re-warehousing certificates, these 4 appellants have deeply involved themselves in sophisticated fraudulent activities. They have also not received the raw materials in the factory and therefore have not utilized for the intended purpose of manufacture of export goods. To avoid easy detection, they have not maintained the accounts properly. This is a case of clear fraud committed by the recipient 100% EOU and their employees and officials. The units supplying to the 100% EOU without payment of duty is basically passing on the benefit of exemption to the 100% EOU based on the CT-3 certificate. The 100% EOU is the beneficiary of the fraud. 19. Having planned the fraud and enjoyed the benefit out of fraud, M/s. Hytaisun Magnetic Ltd. cannot escape the duty liability on the technical ground that the raw material has not been received in the factory. Having taken so many steps for procuring duty raw materials and having paid for the materials, they cannot claim non-receipt of raw materials. They have taken constructive delivery of the materials. The raw materials might not have been received in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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