2018 (9) TMI 747 - HC - Central Excise

Jurisdiction - Whether in the facts and circumstances of the case and in law was the Tribunal justified in holding that the Commissioner (Appeals) has exercised the powers under Rule 96ZM of the Central Excise Rules, 1944 ( the Rules ) without going into the jurisdiction of the Joint Commissioner to pass the original order? Held that - As it is in defiance of the provisions of Section 11A of the Act which at the relevant time only empowered the Collector to adjudicate a notice of demand invoking the proviso of Section 11A of the Act. This issue of jurisdiction goes to the root of the dispute and in the absence of the Tribunal reversing the finding of the Commissioner of Central Excise (Appeals) as recorded in the order dated 14th October 2008, no occasion to give further directions to the original authority can arise. There is no occasion to answer the proposed question of law. It would be appropriate that the impugned order dated 30th March 2007 of the Tribunal is set aside and the issue restored for fresh disposal in accordance with law - appeal disposed off.

Summary

Issues:
Jurisdiction of the Joint Commissioner to pass the original order under Rule 96ZM of the Central Excise Rules, 1944.

Analysis:
The appellant, engaged in embroidery on fabrics, was under the compounded levy scheme but was found to have debited excise duty on only three out of four machines, leading to a demand notice for duty short paid. The Collector issued a show cause notice, later made answerable to the Joint Commissioner, who confirmed the demand. The appellant appealed to the Commissioner of Central Excise (Appeals), who held the Joint Commissioner's order as without jurisdiction and reversed it on merits. The Revenue then appealed to the Tribunal, which set aside the Commissioner's order and directed the appellant to approach the Commissioner for condonation of lapse under Rule 96ZM before the Adjudicating Authority could pass a fresh order.

The High Court found that the Tribunal failed to address the Commissioner's finding that the Joint Commissioner's order lacked jurisdiction, as only the Collector could adjudicate such notices under Section 11A of the Act at the relevant time. Since the Tribunal did not reverse this finding, the High Court held that no further directions to the original authority were warranted. Consequently, the High Court set aside the Tribunal's order and remanded the issue for fresh disposal in accordance with the law, without addressing the proposed question of law.

In conclusion, the High Court disposed of the appeal without costs, emphasizing the importance of addressing the jurisdictional issues at the root of the dispute and ensuring that legal proceedings adhere to the statutory provisions governing adjudication of excise duty matters.