2006 (8) TMI 403

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....ue is involved, therefore, the Stay petitions are taken up together. 2. The brief facts of the case are that M/s. Royal Industries Ltd. and M/s. Punjab Export Ltd. are 100% Export Oriented Unit (EOU). One Shri Harbhajan Singh Sandhu is the Managing Director of M/s. Royal Industries Ltd. and Partner of M/s. Punjab Exports Ltd. Shri Harbhajan Singh Sandhu also Managing Director of M/s. Harman Fashioners Pvt. Ltd. who is a trading unit. M/s. Royal Industries Ltd. and M/s. Punjab Exports Ltd. made import of raw material without payment of duty under Notification No. 53/97-Cus. with the condition that it is to be used in the manufacture of goods which are to be exported. A 100% EOU is also eligible to clear the goods to another 100% EOU ....

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....Harman Fashioners Pvt. Ltd. had also produced certain Shipping Bills showing the export of the goods through Tuti Corin Port. On further verification, it was found that all the documents showing export are fake. Similarly, certain inputs are sent to the job worker for further processing and on verification, it was found that majority of job worker are non-existent and one of the job worker M/s. Adinath Textiles Ltd. has not returned the goods after reprocessing whereas the applicant in their record shown the return of the goods M/s. Adinath Textiles Ltd. M/s. Adinath Textiles Ltd. revealed to the Revenue that in fact they had received the input from the applicant M/s. Royal Industries for processing. After processing they had cleared in the....

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....without excise duty which is less than the custom duty. In case M/s. Royal Industries Ltd. 50% of the raw material was indigenous and in the case of M/s. Punjab Exports Ltd. 87% of the raw material was procured locally. The contention is that in respect of this raw material the demand is confirmed after taking into consideration the Custom Duty, which is higher than the Central Excise duty. The applicant also pleaded that they are entitled for the benefit of Notification No. 2/95-C.E. in respect of demand of duty, which provides the concessional rate of duty @ 50% of the whole of the customs duty. The applicant also pleaded that as the goods were cleared without the permission of competent authority under the EXIM Policy, therefore, the ....

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.... demand in this respect comes to Rs. 1.22 crores in the case of M/s. Royal Industries Ltd. and M/s. Punjab Exports Ltd. the demand comes to Rs. 40 lakhs. The contention is that in respect of the goods which were shown to have been cleared M/s. Devyani Processors Pvt. Ltd. regarding which no re-warehousing certificate produced by the applicant. The demand comes to Rs. 4.56 crores in respect of M/s. Royal Industries Ltd. and Rs. 2.73 crores in respect of M/s. Punjab Exports Ltd. The clearance shown to M/s. Filtex Prints regarding which no warehousing certificate was produced comes to Rs. 3.13 crores. In the case of M/s. Royal Industries Ltd. and in the case of M/s. Punjab Exports Ltd. the demand is in respect of goods shown to Rs. 1.25 crores....