2006 (1) TMI 440 - AT - Central Excise

Export Oriented Unit, 100% EOU - Appeal by Department - Strictures against Commissioner for wasteful litigation

Summary

Issues:
1. Appeal filed by the Commissioner against his own order.
2. Eligibility of LDO for exemption under Notification No. 1/95-C.E.

Analysis:

Issue 1:
The judgment addresses the unusual situation where the appeal has been filed by the Commissioner against his own order. The Tribunal notes that the Commissioner filed the appeal without any direction from a superior authority. The Tribunal criticizes the tendency of some departmental authorities to avoid taking responsibility for their decisions by seeking approval at the Tribunal level. This behavior is identified as a cause of unnecessary departmental appeals. The Tribunal emphasizes the need for accountability among the Commissioners in accepting their own orders.

Issue 2:
The case involves a 100% Export Oriented Unit (EOU) using Light Diesel Oil (LDO) under a CT3 certificate in their chilling plant for temperature control. The Commissioner argues that the unit is not entitled to exemption under Notification No. 1/95-C.E. as they lack approval for fuel and furnace oil. However, the respondents claim that LDO qualifies for exemption as a consumable under Sr. No. 7 of the notification. They assert that they acquired the material with the department's knowledge and argue that the Show Cause Notice issued is time-barred. The Tribunal determines that the impugned goods fall under the category of 'consumable' as per the notification, entitling the respondents to the exemption. Consequently, the order passed by the Commissioner in favor of the respondents is upheld, and the appeal filed by the Commissioner against his own order is deemed meritless. The department's appeal is rejected by the Tribunal.

This judgment highlights the importance of adherence to legal procedures and the correct interpretation of statutory provisions in tax matters. The Tribunal's decision serves as a reminder for departmental authorities to exercise diligence in decision-making and emphasizes the significance of accountability in administrative actions.