2014 (12) TMI 615 - HC - Customs

Competent adjudicating authority - Power of Tribunal - Remanding back matter - Section 129B of the Customs Act - cenvat credit utilised for payment of duty on removal of goods from 100% EOU to DTA - Held that - The power of the Tribunal to remand the case back to the Authority would mean the Authority prescribed under Section 2(1), ie., the competent authority. In this case, it is not disputed by either side that the competent Authority is Commissioner of Central Excise. The primary objection before the Tribunal by the appellant on jurisdiction issue is that the competent authority is not the Commissioner of Customs, but Commissioner of Central Excise. - A conjoint reading of Section 129B with Section 2(1) of the Customs Act makes it clear that the order should be passed only by a competent authority who has jurisdiction to pass an order and therefore, the Tribunal, if it found an error in the order passed by an authority, is justified to remand the case back to the competent authority. Section 129B does not restrict the power of the Tribunal to remand the matter back to the competent authority having given a ruling thereon. We find no error in the order of the Tribunal. Yet another factor which we find in favour of the Department is that the show cause notice was issued by the Superintendent of Central Excise, which Department had jurisdiction to initiate proceedings and the order of adjudication on being set aside by the Tribunal for lack of jurisdiction, the original show cause notice survives and therefore, that has to be adjudicated only by a competent authority in terms of Section 2(1) of the Customs Act. When such being the case, the competent adjudicating authority alone has jurisdiction to adjudicate the issue on the subsisting show cause notice. We find no error in the order of the Tribunal. - Decided against assessee.

Issues Involved:
1. Remanding the matter to the Commissioner of Central Excise after setting aside the order of the Commissioner of Customs.
2. Legal authority of the first respondent under Section 129B of the Customs Act to remand the matter to the Commissioner of Central Excise.
3. Authority of the first respondent to confer jurisdiction on the Commissioner of Central Excise.
4. Remanding the matter to the Commissioner of Central Excise when they were not a party in the appeal.

Detailed Analysis:

Issue 1: Remanding the Matter to the Commissioner of Central Excise
The appellant/assessee debonded its unit from 100% EOU status and engaged in manufacturing shrimp/prawn feed. They availed and utilized cenvat credit for clearances in the Domestic Tariff Area (DTA) during March 2003, which was contrary to Rule 17 of the Central Excise Rules 2002. A show cause notice was issued by the Superintendent of Central Excise, and the Commissioner of Customs (Imports) adjudicated the case, confirming the demand for duty and imposing penalties. The Tribunal, however, concluded that since the unit was no longer a 100% EOU after 31.3.2003, the Commissioner of Customs lacked jurisdiction, and the matter should be adjudicated by the Commissioner of Central Excise.

Issue 2: Legal Authority Under Section 129B of the Customs Act
The appellant contended that the Tribunal lacked jurisdiction under Section 129B of the Customs Act to remand the matter to an authority different from the one that passed the original order. The court examined Section 129B, which allows the Tribunal to pass orders as it thinks fit, including referring the case back to the authority that passed the decision. The court noted that the term "Adjudicating Authority" under Section 2(1) of the Customs Act refers to any authority competent to pass orders under the Act, excluding the Board, Commissioner (Appeals), or Appellate Tribunal. Thus, the Tribunal's remand to the Commissioner of Central Excise was within its jurisdiction as the competent authority.

Issue 3: Authority to Confer Jurisdiction
The Tribunal's decision to remand the matter to the Commissioner of Central Excise was based on the fact that the unit was no longer a 100% EOU at the time of the show cause notice. The court held that the Tribunal was justified in remanding the case to the competent authority, the Commissioner of Central Excise, as per Section 2(1) of the Customs Act. The Tribunal's power to remand the case back to the competent authority is not restricted by Section 129B.

Issue 4: Remanding to a Non-Party Authority
The appellant argued that the Commissioner of Central Excise was not a party to the appeal before the Tribunal. The court found that since the original show cause notice was issued by the Superintendent of Central Excise, the competent adjudicating authority should be the Commissioner of Central Excise. The Tribunal's order to remand the matter to the Commissioner of Central Excise was correct as the original show cause notice survived and required adjudication by the competent authority.

Conclusion:
The court concluded that the Tribunal's decision to remand the matter to the Commissioner of Central Excise was justified and within its jurisdiction under Section 129B of the Customs Act. The competent authority for adjudication post-debonding was the Commissioner of Central Excise. The appeal was dismissed, and the Tribunal's order was upheld, answering all questions of law in favor of the Revenue and against the assessee.

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