AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2000 (12) TMI 122
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....est. A penalty equivalent to the duty demand has also imposed. In addition, penalties have been imposed on several officers of the Company, including Rs. 20 lakhs on Mr. J.C. Khandelwal, Managing Director. 2.The aforesaid actions of the Commissioner are upon a finding that M/s. Euro Cotspin Ltd. clandestinely removed and sold in the domestic area a quantity of 161 MTs. of Polyester/Synthetic yarn without payment of duty during the period April, 1996 to July, 1996. The demand of about Rs. 1.34 crores is on account of the clandestine removal of the yarn without payment of duty, the demand of over 12 lakhs is on account of the under-valuation of the yarn so removed and demand of over Rs. 15 lakhs is on account of non-utilisation of non-duty....
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....ayment of duty. Therefore, duty should be levied under the proviso. The learned Counsel also submitted that Notification No. 2/95 had exempted such goods from so much of the duty as is leviable under Section 3 of the Central Excise Act which is in excess of 50% of the duty leviable. The learned Counsel submitted that the duty demand in the present case has been made in violation of these statutory provisions on the ground that the appellants had not obtained permission for sale of the goods in the domestic tariff area. He contended that such an action is not in accordance with law, inasmuch as, under Section 3 of the Central Excise Act, goods have to be either subjected to duties specified in the First Schedule and Second Schedule to the Ce....
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....s, the learned Counsel submitted that the price realised by the appellant on the sale of the clandestinely removed goods should have been treated as cum-duty (inclusive of duty) and duty charged on that basis. The learned Counsel pointed out that this is settled law in view of the decision of the Tribunal in the case of Srichakra Tyres Ltd. [1999 (108) E.L.T. 361 (T) = 1999 (32) RLT 1]. The learned Counsel submitted that the demand of over Rs. 12 lakhs is untenable on account of a valuation adopted in the order which is contrary to the decision in Sri Chakra tyres. The learned Counsel also submitted that the duty demand of over Rs. 15 lakhs on the raw materials used in the production of the subject goods is also not tenable as that exemptio....
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....ual to the aggregate of the duties of Customs leviable on like goods produced/manufactured outside India if imported into India. Notification 2/95 grants exemption to the goods produced in 100% EOU and supplied to domestic tariff area. Thus, duties of excise are leviable on excisable goods manufactured in India either at the rates specified in the Central Excise Tariff (under sub-section (1) of Section 3 or an amount equal to the aggregate of duties of customs leviable on goods produced outside India and imported into India. In either case, the goods are to be subjected to effective rates of duty after taking into account Exemption Notifications. In the present case M/s. Euro Cotspin Ltd. is a 100% EOU and the goods have been cleared into D....
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....rom the Govt. including duty free import of capital goods. They had, therefore, an obligation to undertake manufacture of the goods in their unit and to export them. They were also entitled to clear up to 25% of the goods produced into the domestic tariff area. Instead of complying with these obligations, the appellants have chosen to carry out clandestine operations and removed part of their produce from the factory and disposed of the same without bringing these goods and their sale proceeds to the books of accounts of the limited company. Such action certainly warrants penalty. However, in view of the revision of the duty demand itself we reduce the penalty on M/s. Euro Cotspin Ltd. to Rs. 35 lakhs. The conduct of the Management of the C....