ASIAN ALLOYS LIMITED AND MR. PAWAN Vs. CCE

JUDGEMENT

(1.) ALL the four appeals have been argued together by the parties relying upon the complete record placed in Excise Appeal No. 3742 of 2003 and are therefore disposed off by this common judgment. Central Excise Appeal Nos. 3741 -42 of 2003

(2.) THESE two appeals are preferred against the order of the Commissioner dated 09.09.2003, determining that the central excise duty of Rs. 4,21,34,053/ - was leviable on the goods removed clandestinely to the Domestic Tariff Area (DTA) as per the ledger account of the appellant unit and ordering the said amount to be paid under Section 11A of the Central Excise Act, 1944, determining that the unit should also pay under the said provision, a further, central excise duty amount of Rs. 1,21,76,522/ - on 49275.32 kgs. of hosiery knitted fabrics, which were found short in comparison to the balance recorded in the bond register, determining that the appellant unit should pay central excise duty of Rs. 23,49,22,178/ - on the fabrics manufactured by the unit on job work, imposing penalty of Rs. 28,92,32,753/ - being the total amount equivalent to the total aforesaid duty amounts, and confirming the interest at the applicable rate was chargeable on the amounts of duty determined to be paid by the appellant M/s Asian Alloys Limited (Excise Appeal No. 3742 of 2003). The other appeal (Excise Appeal No. 3741 of 2003) has been preferred by the Chairman Managing Director of the appellant company against the impugned order imposing penalty of Rs. Seven Crores on him under Rule 209A of the Central Excise Rules 1944 read with Section 38A of the said Act.

(3.) THE case of the Revenue was that the appellant company M/s Asian Alloys Limited was a 100% EOU engaged in the manufacture of Hosiery Knitted Fabrics and knitted garments as per the permission granted by the Government of India under letter No. PER/309/1994/EOB/332/94 dated 5.9.94. The appellant company had undertaken to export the resultant products, namely, knitted fabrics and readymade garments of the FOB value of Rs. 1523/ - lacs in the first year, Rs. 3480/ - lacs in the second year, Rs. 3915/ - lacs in the third year, Rs. 3915/ - lacs in the fourth year, and Rs. 3915/ - lacs in the fifth year, and undertaken minimum net foreign exchange of US 22221 thousand by exporting its entire production (including the sales in the DTA as may be permissible under the policy), for a period of five years beginning from the first day after commencement of commercial production or from the date of agreement. It was stipulated that if the unit was unable to fulfill the export obligation undertaken by it, it would be required to pay the amount of customs duty that would be leviable at the relevant time on the items of plant and machinery and equipment and raw materials, components and consumables allowed for import by the said unit in terms of the licence granted to them, and also the amount of duty leviable on the indigenous plant and machinery and equipment as well as raw materials, components and consumables purchased by the unit during the said period. In Clause (d) of the agreement dated 27.6.1995, it was agreed that under no circumstances the unit will be allowed to dispose off the export product in the domestic market, unless specifically allowed by the Government. Admittedly, the appellant company had executed general bonds (B -17) before the authorities from time to time binding itself with the obligations and undertakings mentioned therein.