2019 (7) TMI 148

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....tion of penalty. 2 E/201-202/2011 2. Ld. Counsel for the appellant pointed out that the appellants are manufacturer of polyester yarn and were inter alia supplying the same to M/s Dimpu Impex, a 100% EOU located at Warthi, Bhandara. He pointed out that the Revenue conducted investigation against the said EOU and came to the conclusion that the said EOU was a defunct EOU with no electricity connection and no manufacturing activity was done in the said EOU. He pointed out that they had cleared 41.24 MTs of polyester yarn under several CT-3 during the period 03.05.2004- 19.05.52004 through the transporter namely, M/s Trade Transport Company, Vapi. He pointed out that the Revenue interrogated the transporter and transporter deposed that whil....

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....asked to the trasporter about delivery of the goods. He also pointed out that the AR-3A and the CT-3 were validly issued by the concerned officers and that has not been challenged by the Revenue at any stage. He argued that the proof of receipt of goods by the EOU in the shape of AR-3A has been rejected on the ground that no physical verification was done by the jurisdictional officers. He pointed out that the circular no. 851/9/2007-Cx dated 03.05.2007, requires physical verification as it is apparent from the para 3 (e) & (f) of the said circular. He pointed out that the reliance was placed in the impugned order on circular 88/98 dated 02/12/1998 and 504/70/99- CX dated 30.12.1999 to state that the re-warehousing certificates 3 E/201-202/....

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....capacity and electricity connnection and was not in a position to use the goods supplied by the appellant. The Revenue has relied on the statements of transporter to hold that the goods have been diverted to Surat. Revenue has also relied on the statements of the representative of the EOU to assert that no goods were received in the premises of the EOU. In this entire course of events, there is hardly any evidence to link the appellants with any activity after the goods were cleared. The law requires the appellant to clear the goods against the valid CT-3 and obtain the duly verified rewarehousing certificate. The appellant have done both and the same has not been challenged. In these circumstances unless specific involvement or knowledge o....