LAWS(CE)-2010-7-136

SPECTRUM FABRICS Vs. CCE

Decided On July 01, 2010
Spectrum Fabrics Appellant
V/S
CCE Respondents

JUDGEMENT

(1.) ON matter being called nobody appeared on behalf of the appellant. However my attention has been drawn to the written submissions filed by the counsel for the appellant, which are to the effect that as the appellant have deposited the entire amount of duty, the penalty imposed upon them be reduced to 25%, by following the decision in the case of Swathi Chemicals Industries Ltd. case reported in, 2009 (248) ELT 421

(2.) I find that the appellant is a 100% EOU engaged in the manufacture of polyester texturised/twisted yarn and polyester grey fabrics. Their factory was visited by the Central Excise Officers on 08.04.2003, who conducted various checks and verifications. As a result, shortage of 2957.560 Kg of raw material was detected. Shri I.J. Memon, authorized signatory of the company, in his statement recorded on 08.04.03 admitted that the said raw material was cleared by them clandestinely without any process at the rate of Rs. 85 per Kg on cash basis. No duty liability was discharged on the same. He also admitted that the said illicitly removed raw material was procured by them duty free under CT -3 procedure. The appellant agreed to pay the evaded duty.

(3.) I find that the impugned order stands passed by the lower authorities on the findings of clandestine removal of the raw material procured duty free and which was found to be short at the time of physical stock taking by the officers on their visit to the factory. It is the statement of Shri Memon, which disclosed that the said material stands cleared by them to outside parties without the cover of any documents. He also disclosed the rate of Rs. 85 per Kg for selling the goods and also disclosed that the consideration for the same has been received in cash. The statement of the Shri Memon was never retracted at any point of time. Further the appellants did not come forward in response to the summons, so as to enable the Revenue to approach the consignees and record their statements. In any case I note that as per the statement of Shri Memon, the yarn in question was sold against cash to the independent buyers in the market, in which case it is not possible for the Revenue to establish the identity of the buyers. The shortages having not been disputed and the statement disclosing clandestine removal having not been retracted, I am of the view that the Revenue has been able to establish the clandestine clearance of the yarn in question. As such the confirmation of demand of duty and imposition of penalty to the extent of 100% EOU is justified. I uphold the same.