2004 (1) TMI 558

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.... Rs. 3,88,168/- were seized on the grounds that the respondents could not produce any duty paying documents i.e. invoices issued by the processors evidencing payment of Central Excise duty. The seizure was made under the reasonable belief that the said goods were offending goods, liable for confiscation. In the subsequent adjudication it was held that the proprietor had admitted to have got the grey fabrics processed from certain processors and no duty was paid on such processed fabrics and there are no, back-ups of any bills and invoices or duty paying documents. 3. On this thin and flimsy evidence the adjudication proceedings culminated in confiscation of seized fabrics, imposition of redemption fine and various penalties on the r....

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....) of the C. Ex. Rules, 1944. (c)        Penalty not be imposed under Rule 209A of C. Ex. Rules, 1944. II (a)    I have carefully considered the finding of the JAC, I cannot agree with him that the silence on the part of M/s. Angan Prints to disclose the actual processors name would visit them with a charge; it can only lead to strong presumption or suspicion about the conduct but not enough to bring home the fact that goods were processed in the jurisdiction of the JAC. (b)        There is no provision in the Central Excise Law transferring the onus on to the purchaser to prove the licit duty paid possession of the material like Section 123 of the ....

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....bsp; Mercifully, the Larger Bench of five judges in the case of Ujjagar Prints & Others v. UOI & Others - 1989 (20) ECR 129 (S.C.) at Para 30 have held -            "30. In the case of processing houses, they become liable to pay excise duty not because they are the owners of the goods but because they cause the 'manufacture of the goods." And in para 30B the purpose of the declarations under Rule 174A was recorded. When processor has been held to be the manufacturer, duty liability is to be on the processor and not the trader (i.e. the raw material supplier or recipient of the processed fabrics) as it being made out in the impugned OIO here. This liability cannot be discharged by any ....