2009 (8) TMI 472 - AT - Central Excise

Cancellation of LOP- the appellant under the Central Excise Act by issuing them a show cause notice on 16-7-2003 on the ground that since the LOP in their favour has been cancelled on 18-2-2003 their activities for receiving the goods as 100% EOU under CT-3s and to process and clear the same to other 100% EOU on CT-3s was in contravention of the Provisions of law and they are liable to pay duties in respect of the said activities. Held that- per the settled law the original LOP cancellation order passed by the Development Commissioner would merge in the final order passed in the same set of proceedings. Appeal admittedly continuation of the earlier proceedings and when the ultimate result of such litigation is in favour of the assessee it has to be held that as if there was never a period when LOP stood cancelled. The order of the adjudicating authority is merged in the order of the appellate authority and in the subsequent order of the Original Adjudicating Authority passed in de novo proceedings. We find no reasons to sustain the impugned order of Commissioner. The same is accordingly set aside and appeal allowed with consequential relief to the appellant.

Summary

In the appellate tribunal CESTAT, Ahmedabad case of 2009 (8) TMI 472, the appellant, a 100% EOU involved in the manufacture of fabrics, had their LOP cancelled by the Development Commissioner. The Central Excise Act proceedings were initiated against them, alleging contravention of the law due to the cancelled LOP. The appellant argued that the LOP cancellation was appealed and subsequently dropped by the Development Commissioner. The adjudicating authority, however, upheld the duty demand on the grounds that the appellant could not be considered a 100% EOU during the period in question. The tribunal found that the appeal against the LOP cancellation order was allowed, and the proceedings were dropped against the appellant. They concluded that the original LOP cancellation order merged with the final order in favor of the appellant, and therefore, the appellant should be considered a 100% EOU during the disputed period. The impugned order of the Commissioner was set aside, and the appeal was allowed with consequential relief to the appellant. The judgment was pronounced in court on 25-8-2009.