1998 (12) TMI 543 - AT - Central Excise

Adjudication in Modvat cases - Jurisdiction - Power of adjudication - Reference to High Court - Demand for Modvat

Summary

Issues:
1. Whether an Adjudication order involving disallowance and recovery of Modvat credit exceeding Rs. 50,000 can be saved under Section 33 of the Central Excise Act, 1944.
2. Whether Rule 57-I of the Central Excise Rules, 1944 and Section 11A of the C.E. Act, 1944 are identical.
3. Applicability of a departmental circular to cases of proposed disallowance and recovery of credit of duty paid on inputs.
4. Validity of an Adjudication order passed by an Asstt. Commissioner disregarding a departmental circular specifying monetary limits for Adjudication.
5. Statutory force of Board's Circular No. 3/92, dated 14-5-1992.

Analysis:

1. The Tribunal examined if the Circular dated 14-5-1992 was issued under Section 33 of the Central Excise Act, 1944. It was concluded that the Circular applies to adjudication of show cause notices proposing demand of duty, including reversal of Modvat credit, confiscation of goods, or imposition of penalties. The Circular was issued by the Board in terms of the proviso to Section 33, empowering officers to adjudicate without limits. The Tribunal held that the Assistant Commissioner's jurisdiction in passing Orders-in-Original cannot be saved under Section 33 alone, disregarding the Circular.

2. The Tribunal clarified that the Notification No. 8-C.E., dated 2-9-1994, was not cited before the Bench, and Section 33 does not specify the manner of delegating powers. The Tribunal noted that the Circular dated 14-5-1992 delegated unlimited adjudication powers of the Collector to lower officers, indicating that the Circular holds significance in the delegation of powers.

3. The Tribunal did not find Question No. 2, regarding the identity of Rule 57-I and Section 11A, to arise from the Order. Similarly, Question No. 3, concerning the applicability of a departmental circular to cases of proposed disallowance and recovery of credit of duty paid on inputs, was deemed not arising from the Order.

4. Question No. 4, related to the validity of an Adjudication order passed by an Asstt. Commissioner disregarding a departmental circular specifying monetary limits, was considered a consequence of Question No. 5 and was not referred to the High Court.

5. Question No. 5, focusing on the statutory force of Board's Circular No. 3/92, dated 14-5-1992, was referred to the High Court for interpretation. The question raised whether the Circular can be considered to have statutory force as a delegation under Section 33 of the Central Excise Act, 1944. The Reference Applications from the Revenue were disposed of accordingly.