P. Anjani Kumar ORDER
S.K. Mohanty, Member (J)
1. Feeling aggrieved with the impugned order dated 30.07.2010 passed by the Learned Commissioner of Central Excise, Customs & Service Tax, Mumbai, these appeals were filed by the appellants M/s. Vivilon Textile Industries Pvt. Ltd. (Appellant No. 1)), Shri Harish Bulchandani, Director of M/s. Vivilon Textiles (Appellant No. 2) and M/s. Confidence Export Pvt. Ltd. (Appellant No. 3). In the impugned order, the Learned adjudicating authority has confirmed Customs duty demand of Rs. 37,65,791/- and ordered for its recovery from the Appellant No. 1 under Section 72 of the Customs Act, 1962 read with sub-section (1) of Section 28 of the said Act. The impugned order has also held that POY valued at Rs. 65,53,677/- is liable for confiscation under Section 111(o) of the Act for violation of the conditions of Notification No. 53/97-Cus., and since the goods were not available for confiscation, it has imposed redemption fine of Rs. 20,00,000/- in lieu of confiscation on the Appellant No. 1. Besides, the impugned order has also imposed penalties on all the appellants in terms of Section 112 of the Act.
2. Brief facts of the case are that the Appellant No. 1 is a 100% EOU engaged inter alia, in the manufacture of Polyester Twisted Yarn (PTY). One of the raw materials used by the Appellant No. 1 to manufacture PTY is Partially Orient Yarn (POY). During the period November' 2001 to March' 2002, the Appellant No. 1 had cleared 17 nos. of consignments of PTY to the EOUs namely, M/s. Bluemoon Textiles (1 consignment), M/s. Maharashtra Weaving Works (4 consignments) and M/s. Sunrise Textiles (12 consignments), all are located in Malegaon. The case of the department is that PTY covered by the above consignments did not reach the premises of EOUs and were diverted in DTA. Based on the investigation, the department had initiated show cause proceedings against the above EOUs, proposing for confirmation of duty demand on the PTY purchased from the Appellant No. 1. The notices issued to the said EOUs were adjudicated in confirming the proposed demand for duty saved on purchase of PTY from the Appellant No. 1. Appeal filed against the adjudication order was rejected by the Learned Commissioner (Appeals). Further, based on the allegation that the Appellant No. 1 had diverted PTY in the DTA, present Show Cause Notice (SCN) dated 23.06.2008 was issued to it, amongst others, seeking for demand of Customs Duty on the POY imported by it. The charges levelled in the SCN was that, in view of diversion of the PTY in the DTA, POY used in the manufacture of said PTY in not entitled to the exemption provided under the Notification No. 53/97-Cus., dated 03.06.1997 inasmuch as the final products (PTY) were neither exported nor delivered to EOUs by way of deemed export and the Appellant No. 1 had contravened the post import condition of the said notification. The matter arising out of the SCN dated 23.06.2008 was adjudicated vide the impugned order dated 30.07.2010, wherein the adjudged demands were confirmed against the appellants.
3. The Learned Advocate appearing for the Appellants submitted that since the duty demand has been confirmed on the above referred EOUs under the proviso to Section 3 of the Central Excise Act, 1944 on the alleged ground that PTY were diverted in the DTA, no further duty demand can be fastened on the raw material imported or procured indigenously without payment of duty by the Appellant No. 1. In this context, the Learned Advocate has placed reliance on the following judgments delivered by the judicial forums:-
(i) Com........