1999 (11) TMI 584

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.... a penalty of Rs. 52 lakhs under Rule 173Q of the Central Excise Rules. 2. The brief facts of the case are that the appellants are engaged in the manufacture of polyester oriented yarn, polyester filament yarn and polyester textured yarn falling under Headings 54.02 and 54.03 of the Schedule to the CETA, 1985. On 30-7-1991, they filed a declaration under Rule 57G indicating POY, PFY and PTY as final products and polyethylene terephthalate (polyester polymer chips) as inputs. On 31-7-1991, they filed an application for permission to remove inputs or partially processed goods under Rule 57F(2) and/or Notification 214/86-C.E. along with an undertaking that the duty liability would be discharged on the finished goods. This application cle....

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....aken directly to the premises of the job worker without being brought into the appellants' premises. (c)      authenticated challans were not issued for the movement of the goods; (d)     payment of duty on methanol (by-product) by job workers is not in consonance with the provisions of the Notification 214/86; (e)     job workers used catalysts and certain packing materials not supplied by the appellants and this was in violation of the condition of Notification 214/ 86 (f)      appellants had not submitted a declaration under Rule 57G declaring PP chips as an intermediate product and POY, PFY, PTY as final products. (g)     t....

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....olding that the appellants had suppressed the fact that M/s. Garware Plastics and Polyesters Ltd. had cleared PP chips without payment of duty under the provisions of Notification 53/88-C.E. 4. We have heard Shri L.P. Asthana, learned Advocate and Shri S. Srivastava, learned DR. 5. The crux of the matter lies in determining whether M/s. Garware Plastics and Polyesters Ltd., were job workers of the appellants herein or they were independent manufacturers. The Department relies upon the letter dated 16-6-92 of M/s. Garware Plastics and Polyesters Ltd. to the Superintendent of Central Excise, Aurangabad to support its finding that M/s. Garware Plastics and Polyesters Ltd. are not job workers for the appellants. In this letter, M/s.....

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....ectly to the job worker is permitted in terms of Trade Notice No. 147/86, dated 8-7-1986 and in fact, the facility of sending inputs directly to the job worker was extended by the Department when it granted permission on 11-10-1991. Such procedure has also be approved by the Tribunal in the case of Lupin Laboratories reported in 1994 (71) E.L.T. 914. There is no dispute that the inputs were received back by the appellants after processing by M/s. Garware Plastics and Polyesters Ltd. and hence movement of inputs directly to M/s. Garware Plastics and Polyesters Ltd. without prior permission is to be considered as only a procedural lapse, in the above context, and procedural non-compliance of Rule 57F(2) cannot stand in the way of substantive ....