2017 (2) TMI 376 - AT - Central Excise

Jurisdiction - Benefit of N/N. 214/86-CE dated 25th March 1986 - job-work - Held that - this aspect was brought to the notice of the first appellate authority who was disinclined to accept that plea on the ground that comity of courts suffices to confer jurisdiction on the adjudicating authority by relying on the decision of the Tribunal in Pushpit Steels Pvt Ltd v. Commissioner of Customs, Kochi 2000 (8) TMI 553 - CEGAT, CHENNAI - The interpretation placed by the first appellate authority on this observation without benefit of the context led him to conclude that the authority that chooses to act first acquires primary jurisdiction to the exclusion of others. It is, in reality, to the contrary. The demand of duty from, and imposition of penalty upon, the appellant is beyond jurisdiction and must fail - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Jurisdictional limits of the original authority in confirming demand on the appellant.
- Proper application of legal principles in confirming duty liability and penalty on the appellant.

Analysis:

Issue 1: Jurisdictional Limits of the Original Authority
The appellant, M/s Crompton Greaves Ltd, appealed against an order confirming a demand of duties of central excise and imposing a penalty. The demand was related to the manufacture of 'enamelled copper wire' by a job-worker from 'wire rods' supplied by the appellant. The job-worker did not pay duty on the production, claiming exemption under notification no. 214/86-CE. The jurisdictional Additional Commissioner initiated proceedings against the job-worker, alleging non-compliance with duty payment conditions. The original authority confirmed duty liability on both the job-worker and the appellant. The appellant challenged the order, arguing that the original authority exceeded jurisdictional limits. The Tribunal observed that the demand was confirmed against the appellant without proper authority of law, as the appellant was registered under a different Commissionerate, precluding officers from another Commissionerate to exercise powers under section 11A of the Central Excise Act, 1944.

Issue 2: Proper Application of Legal Principles
The first appellate authority disregarded the appellant's jurisdictional plea, citing the 'comity of courts' principle. However, the Tribunal clarified that such principle does not apply in the jurisdiction of officials dealing with central excise. The Tribunal emphasized the primacy of the 'proper officer' in matters of assessment and duty demand. Referring to legal precedents, the Tribunal highlighted that assessing Commissionerates have the authority to demand duty, and overlapping jurisdictions should not lead to chaos. The Tribunal held that the demand and penalty imposed on the appellant were beyond jurisdiction and, therefore, set aside the impugned order and allowed the appeal. The decision was pronounced on 05/01/2017 by the Tribunal at CESTAT Mumbai.

This detailed analysis of the legal judgment at the Appellate Tribunal CESTAT Mumbai highlights the issues of jurisdictional limits and the proper application of legal principles in confirming duty liability and penalty on the appellant, providing a comprehensive understanding of the case.