DEPUTY COMMISSIONER OF CENTRAL EXCISE Vs. MADURA COATS LIMITED, REP BY ITS VICE PRESIDENT-EXCISE,NEW JAIL ROAD

JUDGEMENT

(1.) The case of the appellant is that the respondent is a 100% Export Oriented Unit [EOU] manufacturing and clearing various types of fabrics and yarn in Domestic Trade Area [DTA] subject to conditions including payment of applicable Customs and other duties. The respondent executed a Bond No.1/923 dated 11.06.1992 with the Assistant Collector of Central Exercise, Tirunelveli undertaking to abide by the conditions stipulated for Rs.30 crores. On verification of invoices, two types of Domestic Trade Area clearances, (1) Direct sales to textile dealers and (2) Clearance to their own unit viz., Madura Textiles, Vikramasingapuram for further processing and sale were found. But the invoices for the 2nd type of clearances were made in the name of the dealers so as to escape the scrutiny by the Department and to escape assessment under Section 14 of the Customs Act, 1962.

(2.) The respondent has filed the writ petition Nos.2783 and 2782 of 2002 challenging the Show Cause Notices dated 01.11.2001 and 07.11.2001 respectively, wherein, the appellant demanded the respondent to show cause as to why Rs.2,26,52,858/- [Rupees Two Crores Twenty Six Lakhs Fifty Two Thousand Eight Hundred and Fifty Eight Only] and Rs.6,15,58,731/- [Rupees Six Crores Fifteen Lakhs Fifty Eight Thousand Seven Hundred and Thirty One Only] respectively should not be recovered towards component of excise duty allegedly not paid for the clearance of Grey and Processed fabrics from the 100% EOU periods from 1994-1996 & 1993-1996 respectively, and demanding penalty under Rule 173Q and Section 11AC of Central Excise Act. The respondent on receipt of the show Cause Notice, submitted its explanation and thereafter, challenged the same in W.P.Nos.2782 and 2783 of 2002 respectively.

(3.) The learned single Judge quashed the Show Cause Notices. Aggrieved by the order passed by the learned single Judge, the present writ appeal has been filed by the appellant.