2009 (5) TMI 855

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....cs during the period 1-12-1996 to 15-12-1998 by recording statements of around 20 persons who had engaged ERTP for processing fabrics. It transpired in the investigation that one Shri V. Ramachandran, Proprietor of M/s. Nag Enterprises, Erode had coordinated between ERTP and their customers for facilitating processing of the fabrics and return of the fabrics to various persons who were also found to be exporters. A show-cause notice was issued to ERTP and Shri V. Ramachandran proposing to recover central excise duty evaded from ERTP and to penalize both ERTP and Shri V. Ramachandran of M/s. Nag Enterprises. Adjudicating the allegations, vide the impugned order, the Commissioner demanded excise duty to the tune of Rs. 4,00,72,500/- from ERTP....

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....ed fabrics from ERTP and that M/s. Nag Enterprises had coordinated the processing activity. In these cases bills for processing were raised by M/s. Nag Enterprises. Fabrics had been entrusted for processing by exporters of processed fabrics or readymade garments made out of them. The persons who had got the fabrics processed by ERTP were not required to incur any liability towards central excise duty as the processed fabrics or goods manufactured therefrom had been exported. Therefore the customers of ERTP had not colluded with ERTP in evading central excise duty. In the impugned order, in any case, there is no indication that Shri V. Ramachandran was aware of the central excise duty liability on the processed fabrics cleared by ERTP in the....