Jyoti Balasundaram, Vice-President
1. The above appeals arise out of the order of the Commissioner of Central Excise, Surat, confiscating 47956 yards of imported processed fabrics found in excess in the factory of M/s. Dhanlaxmi Garments Pvt. Ltd. (100% EOU) on 22-8-2000 when Central Excise officers visited the factory, with an option to redeem the goods on payment of fine of Rs. 4,37,000/- confirming customs duty demand of Rs. 30,37,059/- and imposing penalty of Rs. 3 lakhs on the importer and Rs. 2 lakhs upon its Director.
2. We have heard both sides. The 100% EOU is entitled to procure duty free imported fabrics for the manufacture of garments for export or for disposal in accordance with the provisions of Exim Policy read with the provisions of Customs Act and Central Excise Act. However, the unit procured goods under seizure illicitly without the cover of duty paying documents (the goods contained the stickers “made in Korea” and are therefore of foreign origin). The unit could not produce any bill of entry or any other valid documents for licit import/procurement of the seized quantity. The defence of the unit that the goods in question was received back from the job worker has been rightly rejected by the Commissioner on the ground that the job worker denied having undertaken any job work for the appellant unit. The Commissioner has also considered the plea of error in calculation and rejected the same as untenable.
3. No ground has been made out by the appellants before us against the confiscation, imposition of penalty and duty demand. The only argument raised, namely, that non accountal of excess stock of raw material cannot lead to confiscation/demand/penal action requires to be rejected in the light of Tribunal’s Order No. A-575-576/WZB/2004/C-I dated 18-3-2004, , in the case of the same appellants upholding the demand on duty free fabrics imported by the 100% EOU and diverted into the local market without being used in the manufacture of export garment and upholding the liability to confiscation and penalty, wherein no defence was raised on merits against the demand and hence confiscation, duty demand and penalty upon the 100% EOU is sustainable. Penalty on the second appellant also requires to be sustained in the light of his admission that he could not produce any documents evidencing legal import or purchase of the seized goods and that there was no relevance of the goods under seizure with goods claimed to have received back from the job workers.
4. In the light of the above discussion we uphold the impugned order and reject the appeals.
(Pronounced in Court on 18-10-2006)