- (1.) The appellant is a company registered under the Companies Act, 1956 and is engaged, inter alia, in the manufacture of excisable goods, namely, synthetic yarn and for that purpose it has a factory at Unit-I, Survey No. 59/1/14, Amli, Piparia Industrial Estate, Silvassa (U.T. of D.N.&H). The said factory is a 100% Export Oriented Unit (EOU). Prior to 6th November, 2006, Sarla Performance Fibers Limited was known as Sarla Polyesters Ltd. Shri Madhusudan Jhunjhunwala and Shri Satish Kumar Sharma were the Chairman and the excise in-charge respectively of Sarla Performance Fibers Limited. Shri Dineshchandra Pandey was the dispatch in-charge of M/s. Hindustan Cotton Company, a partnership firm, engaged inter alia, in trading of Polyester Textured/Twisted Dyed Yarn since 1988. Sh. Gopal Bhagwan Dutt Sharma was the Manager of Sarla Performance Fibers Limited at the relevant time. The reference to appellants herein will mean and include all the appellants.
(2.) The appellants had procured partial oriented yarn (POY) falling under Chapter 54 without payment of duty for the manufacture of various types of yarn, namely, polyester texturised yarn, nylon covered yarn and polyester covered yarn. A show cause notice No. V(Ch.54)15-6/OA/2000 dated 16th May, 2001 was issued by the Commissioner of Central Excise, Surat II requiring the appellant to explain why central excise duty of Rs.32,92,854/-should not be recovered on the texturised yarn allegedly removed by the appellants without payment of duty. The said show cause notice also required the appellants to explain why penalty should not be imposed under Section 11AC of the Central Excise Act, 1944 (for short, 'the Act'). That apart, the show cause notice also sought to confiscate the nylon covered yarn valued at Rs.1,72,186/-and further to recover duty thereon of Rs.55,202.96.
(3.) After the show cause notice was issued, the appellants made payment aggregating to Rs.14,89,349.00 as against the duty payable under Section 3(1) of the Act (after taking into account the cum-duty benefit) and Rs.11,19,775.00 payable in the event the benefit of Notification No. 2/05 was allowed.;