1995 (2) TMI 88 - AT - Customs

Summary

Issues involved:
The issues involved in the judgment are the exemption of goods under Notification No. 13/81 for an Export Oriented Unit (EOU) and the jurisdiction of Customs Authorities over the demand for duty on imported goods.

Exemption under Notification No. 13/81:
The appellants, a 100% EOU manufacturing 'Charge Chrome', imported sodium peroxide as consumables for testing raw materials and finished products. Customs Authorities alleged that the sodium peroxide was not used for the manufacture of charge chrome as per Notification No. 13/81, leading to a demand for duty under Section 28 of the Customs Act, 1962. The Tribunal's Special Bench 'C' found in favor of the appellants, stating that sodium peroxide was indeed covered by the notification as a consumable for manufacturing charge chrome.

Jurisdiction of Customs Authorities:
The dispute arose regarding the jurisdiction of Customs Authorities in Orissa to initiate proceedings after goods had been assessed at Calcutta Customs House. The referring Bench disagreed with the earlier decision in the case of Ferro Alloys Corporation Ltd., stating that the Assistant Collector having jurisdiction over the EOU is competent to demand duty on goods not proven to have been used in the manufacture of the export product. The Larger Bench, after considering various precedents, held that the jurisdiction for raising demand for short levy lies with the proper officer having jurisdiction over the EOU and not the Custom House where the goods were initially assessed for warehousing.

Conclusion:
The judgment clarified the application of Notification No. 13/81 for EOUs and established the jurisdiction of Customs Authorities over the demand for duty on imported goods, emphasizing the role of the proper officer in charge of the EOU. The decision highlighted the importance of adherence to legal provisions and precedents in determining jurisdictional matters related to duty demands on exempted goods.