SARLA PERFORMANCE FIBRES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition is filed basically to challenge pre-deposit order dated 16-7-2007 as well as order dated 27-10-2008 passed by the respondent 2, rejecting the modification application filed by the petitioners.

(2.) The petitioners are a 100% Expert Oriented Unit (for short, EOU). They are engaged in manufacturing of Synthetic Yarn. It is the case of the petitioners that pursuant to the orders placed by Ashnoor Textiles Mills Limited, formerly known as Gupta Carpet Udyog Limited (for short, "GCUL"), a 100% EOU, the petitioners supplied Polyester Filament Yarn (PTY/PFY) from time to time to GCUL. Pursuant to the intelligence received, the Central Excise conducted searches at the premises of certain 100% EOU. Show cause notice was issued to the petitioners' Silvassa Unit and GCUL, Gurgaon. It was, inter alia , alleged in the said show cause notice dated 13-6-2000 that the petitioners as consignors removed PTY/PFY to the GCUL against CT-3 certificate obtained by them. But, the same did not reach the premises of the consignee and were sold in local market by the consignee with the assistance of the petitioners. It was further stated in the show cause notice that the consignee is liable to pay duty on the yarn cleared by the petitioners on the strength of the CT-3 certificates obtained by them from the Excise Department after complying with Chapter X procedure including execution of bonds indemnifying Excise Department for payment of duty demanded. Another show cause notice bearing F. No. DGAE/DZU/40/98/2021, dated 13-8-2001 was issued to the petitioners' Vapi unit and the GCUL, Gurgaon. The petitioners filed their replies.

(3.) On 18-12-2006, the Commissioner (Adjudication) Central Excise confirmed the duty demanded and penalties imposed. Being aggrieved by the said Order-in-Original dated 18-12-2006 to the extent it confirmed the duty demanded from the petitioners in respect of the said two units at Silvasa and Vapi, the petitioners filed their separate appeals before respondent 2 under Section 35B of the Central Excise Act, 1944. The petitioners also filed applications for waiver of pre-deposit of duty demanded and penalties imposed and stay of recovery thereof, pending the hearing and final disposal of the said appeals.