2004 (1) TMI 165 - AT - Customs

Summary

Issues Involved:
Jurisdiction of the adjudicating authority in confirming demand for duty short levied in the case of an export-oriented unit.

Analysis:

1. Jurisdiction of the Adjudicating Authority:
The case involved a dispute regarding the jurisdiction of the adjudicating authority in confirming the demand for duty short levied in the context of an export-oriented unit (EOU). The appellants contended that the Addl. Commissioner of Customs, Ahmedabad, who issued the show cause notice and adjudicated the matter, was not the proper officer for confirming such a demand. They argued that, in the case of a 100% EOU like themselves, the proper officer should be the Deputy Commissioner with whom the EOU has executed a bond as per the warehousing provisions under Chapter IX of the Customs Act, 1962. The appellants relied on a precedent from a Larger Bench decision in Ferro Alloys Corpn. Ltd. v. CC (Appeals) Bhubneswar [1995 (77) E.L.T. 310] to support their argument.

2. Decision and Analysis:
Upon reviewing the Larger Bench decision cited by the appellants, the Member (J) of the Appellate Tribunal found merit in their plea regarding jurisdiction. The judgment clarified that the officer with jurisdiction over the export-oriented unit is deemed the proper officer for raising a demand for short levy. In this specific case, the demand had been raised by the officer with jurisdiction over the Customs house where the goods were seized, rather than the officer overseeing the EOU where the manufacturing activities took place, i.e., the Dy. Commissioner. It was noted that despite the jurisdictional issue being raised before the authorities, the Adjudicating authority failed to address it, and the Commissioner (Appeals) incorrectly categorized the demand under a different section of the Customs Act. Relying on the precedent from the Larger Bench decision, the Member (J) concluded that the adjudication order lacked jurisdiction. Consequently, the impugned order upholding the adjudication was set aside, and the appeal was allowed solely on the grounds of jurisdiction without delving into the merits of the case.