2008 (4) TMI 120 - AT - Customs

Non-fulfillment of condition (export obligation) of general exemption Not. No. 53/97 - when the Development Commissioner does not hold otherwise in respect of a unit, there is no scope to sit over his judgment appellant should succeed on the basis of the certificate issued by the Development Commissioner certifying that export obligation has been fulfilled - since assessee, EOU has fulfilled export obligation, then there is no basis for issue of SCN revenue appeal dismissed

Summary

Issues:
- Appeal against dropping of proceeding drawn by Show Cause-cum Demand notice
- Fulfillment of conditions of general exemption Notification No. 53/97
- Requirement for issue of Show Cause Notice based on Circular No. 21/95
- Authority of Development Commissioner in executing EXIM policy

Analysis:
1. The appeal was made by the Revenue against the dropping of the proceeding initiated through a Show Cause-cum Demand notice. The Revenue contended that the Respondent failed to meet the conditions of general exemption Notification No. 53/97. The Adjudicating Authority was accused of unreasonably dropping the proceeding without considering the alleged violation by the Respondent. The Revenue argued that the matter was dealt with mechanically, causing unjustified relief to the Respondent.

2. The Respondent, represented by a Senior Counsel, argued that as a 100% Export Oriented Unit (EOU), they had fulfilled all obligations required under the disputed Notification. It was emphasized that the fulfillment of obligations could be within the prescribed limitation period or the extended period as per the proviso to para 6(i) of the Notification. The Respondent succeeded before the Adjudicating Authority on two grounds. Firstly, it was pointed out that as per Circular No. 21/95, a Show Cause Notice could only be issued if the Development Commissioner determined that a unit had failed to meet export requirements. Since no such determination was made against the Respondent, there was no basis for the notice. Secondly, it was argued that the Adjudicating Authority's detailed order of adjudication, which considered the certificate issued by the Development Commissioner, was reasoned and held that the Commissioner's judgment should not be questioned unless explicitly contradicted.

3. Upon hearing both sides and examining the record, the Tribunal acknowledged the binding nature of the Board Circular on Administrative Authorities for ensuring uniformity in applying the law. It was noted that the Commissioner had conducted a thorough inquiry into the Respondent's fulfillment of obligations. The Tribunal found the order of adjudication to be elaborate, reasoned, and not legally flawed. Intervening at the Revenue's behest would disrupt a settled position. Therefore, the Tribunal dismissed the Revenue's appeal, upholding the decision to drop the proceeding initiated by the Show Cause Notice.

(Dictated and pronounced in the open Court)