Hon'ble Judges/Coram:
Ramesh Nair, Member (J) and Raju

ORDER

Ramesh Nair, Member (J)

1. The present appeals have been filed by M/s. Vandevi Texturizers Pvt. Ltd. and Shri Sanjay Ratan Prakash Aggarwal, Chief Executive Officer of M/s. Vandevi Texturizers Pvt. Ltd. against the Order No. RS/94-98/SRT-II/07 dated 26.02.2007 passed by the Commissioner (Appeals), Surat - II. The brief facts of the case are that the Appellants are engaged in the manufacture of Polyester Knitted Fabrics from Polyester Yarn. They are clearing their finished goods to other 100% EOUs against CT-3 certificates. During the relevant period they had cleared goods to EOU unit M/s. Sunshine Overseas, Navsari which is also an 100% EOU. Investigations were carried out at M/s. Sunshine Overseas, during which statement of Partner, Rasid Sadatali Saiyed was recorded wherein he stated that he was holding 90% shares in M/s. Sunshine Overseas and 10% shares were held by Shri Sushil Bansal. That the real owner of the firm is Shri Harron Bhai, who is taking 90% profit. He also stated that they were purchasing fabrics from Surat and after cutting and stitching, they manufacture Scarfs and Dupattas, which were exported. From January 2003, they received fabrics of different types under the cover of annexures issued by the Central Excise and they were showing fictitious names and addresses of the buyers at Bhiwandi on the Central Excise DTA invoices as no goods were delivered. He also stated that Shri Haroon Chhaya, owner of M/s. Al Amin Exports and Shri Irfan Bhai are looking after all monetary dealings of M/s. Sunshine Overseas. Statements of Shri Irfan and Shri Haroon were recorded wherein they stated that the entire operations of M/s. Sunshine were looked after by them. That they were not holding any position in firm but were looking after entire work. No material was received by them against CT-3 issued in favour of M/s. Sunshine. They were making exports out of raw material received from M/s. Bilal Latif Memon. Investigation at Appellant firm M/s. Vandevi Texturizers was carried out wherein their Manager, Shri Hariram Chaudhary was recorded wherein he stated that the goods were cleared on paper and were not physically delivered to M/s. Sunshine and the goods were sold in the open market. The Chief Executive Officer Shri Sanjay R.P. Agarwal of M/s. Vandevi Texturizers in his statement also stated that they prepared the documents reflecting clearances of goods from the factory but the same were sold in the open market and proceeds were returned in cash. He was not able to identify the customers to whom the goods were sold. The Officers also recorded the statements of the transporters and other persons. Based upon the investigation, M/s. Vandevi Texturizers were issued show cause notice demanding duty amounting to Rs. 34,86,256/- on 231415.217 kg of Polyester Yarn alleging the same was not used in manufacture of fabrics but were diverted in the open market. It was also proposed to confiscate the same and to impose penalty u/s 11AC of Central Excise Act and Rule 26 of Central Excise Rules, 2002. Penalty on other Appellant was also proposed. Vide Adjudication Order dated 31.03.2006, the demands as proposed were confirmed and penalty was imposed upon M/s. Vandevi Texturizers Pvt. Ltd. and other Appellants. The diverted goods were also ordered to be confiscated with an option to redeem the same on payment of........