2005 (12) TMI 438 - AT - Central Excise

Summary

Issues:
1. Alleged removal of bonded goods without payment of duty or following statutory procedure.
2. Validity of show-cause notice without clearance from the Board of Approval or Development Commissioner for a 100% EOU.

Analysis:
1. The case involved a 100% EOU engaged in manufacturing monuments. Central Excise officers found discrepancies during a visit, including a dilapidated excavator, missing imported machinery, and alleged removal of bonded goods without duty payment. A show-cause notice was issued for duty recovery and penalties. The Additional Commissioner upheld the demands and penalties, confiscating the excavator. The first appellate authority, however, allowed the party's appeal, leading to the Revenue's current appeal.

2. The Commissioner (Appeals) relied on Circulars and Tribunal decisions to argue that adjudication without clearance from the Board of Approval or Development Commissioner was unsustainable. The appellant contested this, stating that prior intimation to these bodies was unnecessary for cases of illicit removal. The Tribunal, in its decision, referenced Circulars and held that for demanding duty from a 100% EOU, intimation to the Development Commissioner was necessary before issuing a show-cause notice. The Tribunal found the appellant's arguments unconvincing, noting that the department had not referred to the Development Commissioner before or after issuing the notice.

3. The presiding judge, after considering submissions, upheld the lower authority's decision, citing the binding precedent set by the Tribunal's earlier decision in a similar case. The judge emphasized the importance of complying with Circulars that require intimation to the Development Commissioner before demanding duty from a 100% EOU. The judge found no merit in the appellant's argument that prior intimation was unnecessary, as the Circulars clearly outlined the procedure. Therefore, the impugned order was sustained, and the appeal was dismissed.

This detailed analysis of the judgment highlights the issues of alleged duty evasion and the necessity of following proper procedures when issuing show-cause notices to 100% EOUs, as outlined in relevant Circulars and Tribunal decisions.