2015 (10) TMI 1265

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.... Industries Ltd (Dyeing Division) (in short "the Company") was engaged in processing of Dyed Polyester Filament Yarn. It has been alleged in the Show Cause Notice dt.09.04.2003 that the said Company cleared the Dyed Yarn to the various traders without payment of Central Excise duty. By the impugned Adjudication order, the Commissioner of C.Ex & Customs, Surat-II confirmed the demand of duty of Rs. 91,99,802.00 alongwith interest and imposed penalty of equal amount of duty on the said Company (M/s Navpad Textile Industries Ltd.) It has also imposed penalties on the various traders ranging from Rs. 5,000.00 to Rs. 1,60,000.00, a penalty of Rs. 23 lakhs imposed on the Director of M/s Navpad Textile Industries Ltd, who are Appellants herein. Th....

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....er the cover of delivery challans and Bills. He produced the Xerox copies of delivery challans and bills to the investigating officer. It is noted that all statements are mostly similar in nature. 5. On perusal of the Adjudication order, we find that the Appellants had purchased the goods on the basis of challans and bills issued by the said company. The learned Authorised Representative for the Revenue drew the attention of the Bench to Para 74 of the impugned order. It is observed by the Adjudicating authority that the Appellant received the finished goods from the said Company under the cover of delivery challans/bills without the cover of Central Excise invoices and without payment of duty. They also confirmed that the invoices issue....

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....se invoices, showing the duty paid character of the fabrics, were not received by the said appellants. However, we find that for imposing penalties under Rule 209A of the erstwhile Central Excise Rules, 1944, the criteria that the person dealt with the excisable goods with the knowledge or belief that the goods liable to confiscation, is required to be satisfied. We find absence of such evidence on record. There is nothing either in the statements of the accused persons or any other independent evidence reflecting any knowledge on the part of these two appellants to show that they were aware of the fact that M/s. Anu Textiles Mills Pvt. Ltd., was clearing the fabrics without payment of duty, neither has it been shown to us that the said app....