2002 (1) TMI 429 - AT - Central Excise

Commissioner of Central Excise, Jaipur - Jurisdiction - Demand - Limitation - Rebate of duty

Issues Involved:
1. Jurisdiction of the Commissioner of Central Excise, Jaipur.
2. Time-bar of demand under Section 28 of the Customs Act, 1962 and Section 11A of the Central Excise Act, 1944.
3. Fulfillment of export obligation and liability to pay duty on capital goods.
4. Confiscation and penalty on goods.
5. Demand for proof of export and recovery of duty.

Detailed Analysis:

1. Jurisdiction of the Commissioner of Central Excise, Jaipur:
The appellants contended that the Commissioner of Central Excise, Jaipur lacked jurisdiction to adjudicate the matter under customs law. They argued that the Commissioner of Customs, Jodhpur was appointed as the Commissioner of Customs for Rajasthan as per Notification No. 27/97-Cus. (N.T.), dated 7-7-97. However, the respondents countered that the Ministry of Finance had appointed the Commissioner of Central Excise, Jaipur to adjudicate cases pertaining to 100% EOUs within his administrative control. The Tribunal found force in the respondents' submissions, noting that the appellants had been voluntarily submitting to the jurisdiction of the Commissioner of Central Excise, Jaipur. The Tribunal rejected the preliminary objection as untenable.

2. Time-bar of Demand:
The appellants argued that the demand was time-barred since the goods were imported between 1986-1988 and the show cause notice was issued on 10-1-1996, with no suppression clause invoked. The respondents relied on the Supreme Court's judgment in Commissioner of Customs (Import) Mumbai v. Jagdish Cancer and Research Centre, which held that the obligation to pay duty under Section 125(2) of the Customs Act does not attract the provisions of Section 28(1). The Tribunal agreed with the respondents, stating that there is no bar against the demand of differential duty and the liability is a continuing one.

3. Fulfillment of Export Obligation and Liability to Pay Duty:
The appellants admitted to exporting goods worth Rs. 2.05 crores but argued that they had to close their unit in December 1992 due to a business slump. They applied for debonding of the unit and contended that the demand was premature. The Tribunal noted that the appellants had not fulfilled the condition of exporting goods for ten years as stipulated in their Industrial Licence. Therefore, they were liable to pay customs and central excise duties on the goods procured duty-free. The Tribunal directed that the duty be calculated on the depreciated value as per the Board's instructions.

4. Confiscation and Penalty on Goods:
The Commissioner had ordered the confiscation of indigenous capital goods and raw material lying with the appellants under Rule 173Q of the Central Excise Rules, 1944, with an option to redeem on payment of a fine. He also imposed penalties under Rule 173Q and Section 112 of the Customs Act. The Tribunal upheld the findings that the goods were liable to confiscation and penalty but directed the quantum of fines and penalties to be re-determined based on the depreciated value of the goods.

5. Demand for Proof of Export and Recovery of Duty:
The Commissioner had dropped the demand of Rs. 23,79,369/- for goods cleared under AR-4 No. 3/92-93, dated 23-12-92, as the demand was beyond six months and no suppression clause was invoked. The respondents argued that the duty was recoverable under Rule 14A if proof of export was not furnished. The Tribunal noted that there is a continuous obligation for exporting goods and no time-bar for the demand of duty. The Tribunal remanded the case for re-examination, allowing the appellants to produce collateral evidence to establish that the goods were exported.

Conclusion:
The Tribunal upheld the liability of the appellants to pay customs and central excise duties, subject to depreciation. It also upheld the confiscation and penalties but directed re-determination based on depreciated values. The case was remanded for re-adjudication, providing the appellants an opportunity for written and oral submissions.

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