EURO COTSPIN LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ARGUING the case for the three appellants Shri G. Shiv Das, ld. Counsel submits that the appellant is a 100% Export Oriented Unit manufacturing Polyester/Synthetic Yarn, Cotton Yarn and Blended Yarn; that the appellant maintains a running bond account which at the time of clearance of goods meant for export, is debited with an amount equivalent to the Central Excise Duty payable on the goods cleared; that the appellants in the month of June, 1996 cleared five consignments for export after debiting the requisite amount in the running bond account; that the samples of the goods sent to foreign purchasers were not approved and therefore, the goods cleared were diverted to the Domestic Tariff Area. He submitted that the Officers of Central Excise Department visited their warehouse and seized the yarn; that the departmental authorities conducted detailed investigations; that the appellants calculated the amount of duty and paid the same; that a SCN was issued on 3 -1 -1997 to confirm the amount of duty and proposing penal action under Rule 14A and Rule 173Q of Central Excise Rules.

(2.) HE submitted that under the SCN, penalty was proposed to be imposed under Rule 173Q; that Rule 173Q was not applicable in their case as the appellants were governed by provisions of Chapter VA of the Central Excise Rules, 1944; that the Ld. Commissioner proceeded to impose penalty under Rule 209 of the Central Excise Rules; that this rule was not invoked in the SCN; that the Commissioner himself holds that the appellants are liable to penal action under Rule 14A of the Central Excise Rules, 1944; that the imposition of penalty under Rule 209 is incorrect.

(3.) LD . Counsel submits that under Rule 14A of the Central Excise Rules, 1944, the maximum penalty that can be imposed is only Rs. 2,000/ -.