TaxTMI 
TaxTMI 
2010 (7) TMI 440
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....he manufacture of HDPE / PP woven sacks laminated with Kraft paper falling under Chapter Sub-heading 48.19.19 of the Central Excise Tariff. The EOU had made deemed exports of its finished goods to other 100% EOUs and had not made physical exports outsideIndiadirectly. On request of the assessee, the jurisdictional Development Commissioner, VEPZ allowed SAPL to make DTA sales in terms ofPara9.9.(e) of Exim Policy 1997-2002. Three such letters of permission were issued to SAPL. Pursuant to these letters of permission, the assessee effected clearances to the DTA from29-6-2001to11-5-2002. Scrutiny of the records of the assessee showed that the assessee had made clearances of its finished goods to DTA availing benefit of Notification No. 8/97-C.....
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....ssessee liable to penalty under Rule 173Q and 209 of Central Excise Rules, 1994, Rule 25 of Central Excise (2) Rules, 2001 and Rule 25 of Central Excise Rules, 2002 for the respective periods when these rules were in force. She found Shri V.S. Prasad, Managing Director of SAPL as the person responsible for the assessee having indulged in transactions in violation of the Central Excise Rules. She passed the impugned order demanding differential duty of Rs. 1,75,93,472/- found due on DTA sales made during the material period as well as applicable interest under Section 11AB of the Central Excise Act, 1944. She imposed a penalty of Rs. 1 lakh on SAPL under Rule 173Q and Rule 209 of Central Excise Rules '44 and Rule 25 of Central Excise Rules, ....
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.... of mens rea and in the absence of proposal to confiscate the goods, penalty could not be imposed. The appeal filed by Shri V.S. Prasad, Managing Director of SAPL impugning penalty imposed on him is also similar worded. 3. We have heard ld. Counsel for the appellants and ld. JDR for the Revenue. 4. We have carefully perused the case records and the submissions made during hearing. From the reply furnished to the Commissioner in response to the show cause notice, we note the following submissions :- The Development Commissioner had issued permission to the assessee to make DTA clearances under para 9.9(e) of the Exim Policy 1997-2002. The clearances made under this provision were not entitled to benefit of Notification No. 8/97....
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....msp;The rate of duty applicable to clearances and the extent of clearances allowed under these paras are different. The Development Commissioner had issued three letters of permission to the EOU. The letters very clearly mentioned that the EOU should pay full duties and taxes on clearances made in terms specified. The finished goods and the value limit were also specified. Therefore, we cannot hold that the Development Commissioner had specified the relevant policy as para 9.9(e) inadvertently. The assessee admitted in its reply to the Commissioner that it was not entitled to make DTA clearances availing Notification No. 8/97-C.E. and paying only the applicable central excise duty accordingly. As per the reply to the SCN, the appellant admi....
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....be reconsidered and correct duty liability needs to be worked out by the Commissioner. As regards the penalty imposed on the assessee for violation of provisions of Rule 100D, 100C of Central Excise Rules, 1944 and Rule 17 of Central Excise Rules, 2001/2002, we find that the assessee has consistently maintained that the Department and the appellant were under the bona fide belief that it was entitled to benefit of Notification No. 8/97-C.E. The appellant had informed the Department when it availed the said benefit. The Department was kept informed of every such clearance within 24 hours of making the clearance. Therefore, we cannot hold that the assessee had deliberately short paid the duty due or violated provisions relating to maintenance....