2008 (11) TMI 727 - HC - Central Excise

Summary

Issues involved: Jurisdiction of authority to issue show cause notice, interpretation of provisions related to tax concessions for Export Oriented Units.

Jurisdiction of authority to issue show cause notice:
The petitioner, an Export Oriented Unit, challenged a show cause notice dated 07.07.2006 issued by the authority, questioning the necessity of paying tax on certain items. The petitioner contended that the authority lacked jurisdiction to issue the notice, citing provisions supporting the petitioner's position. The petitioner argued that the notice should be quashed due to the disregard of key provisions in favor of the petitioner.

Interpretation of provisions related to tax concessions:
The petitioner's counsel relied on specific provisions, including paragraph 2(b) of Chapter of Export Oriented Units (EOUs) and paragraph 6.6.1 of Chapter 6 of Export Oriented Units (EOUs) Scheme. These provisions allowed for the import of various goods, including capital goods, without duty payment for approved activities. The counsel argued that even if the items mentioned in the show cause notice were considered spares and not samples or tools, the petitioner was still entitled to exemption as per the extracted provisions.

The Additional Solicitor General of India contended that challenging the show cause notice directly before the court was premature, as the petitioner had the opportunity to address the concerns raised in the notice before the relevant authority.

The court directed the petitioner to submit a detailed explanation to the show cause notice within ten days, citing relevant provisions. The adjudicating authority would then decide the matter after providing the petitioner with a fair hearing, as per paragraph No.10 of the counter affidavit filed in the writ petition.

In conclusion, the writ petition was disposed of with the mentioned direction, and no costs were awarded. Connected Miscellaneous Petitions were also closed as a result of this judgment.