1993 (11) TMI 138 - AT - Central Excise

Summary

Issues:
1. Whether the clearance of spares under Notification 13/81 for a 100% Export Oriented Unit (EOU) is permissible.
2. Jurisdictional authority to issue show cause notice and reassessment of goods.
3. Inclusion of spares/consumables within Notification 13/81 before its 1984 amendment.

Analysis:

Issue 1:
The case involved the question of whether the clearance of spares under Notification 13/81 for a 100% EOU was permissible. The authorities initially contended that the spares were not covered under the terms 'capital goods,' 'raw materials,' and 'components.' A show cause notice was issued, and the demand was confirmed by the Assistant Collector of Central Excise. However, the Collector of Customs (Appeals) allowed the appeal, considering the spares as essential for the operational machinery and falling within the ambit of capital goods. The Tribunal examined the issue and upheld the decision, emphasizing that the spares were necessary for the machinery's operation and should be considered capital goods, thereby entitled to duty exemption.

Issue 2:
Regarding the jurisdictional authority to issue a show cause notice and reassessment of goods, the Revenue argued that the Assistant Collector of Customs & Central Excise in Chandigarh had the jurisdiction. However, the consultant for the respondents contended that the jurisdiction rested with the authorities who made the original assessment at the Delhi Custom House. The Tribunal agreed with the consultant, citing a previous judgment and held that the reassessment could only be done by the authorities who conducted the original assessment. Therefore, the appeal was set aside based on the question of jurisdiction alone.

Issue 3:
The matter of whether spares/consumables were included within Notification 13/81 before its 1984 amendment was also discussed. The Tribunal noted that while an amendment was made in 1984 to include spares of machinery and consumables, it did not preclude these items from being considered under the original notification. The Tribunal highlighted that interpreting the law should be based on its original form without considering subsequent amendments unless explicitly stated. As a result, the Tribunal dismissed the appeal based on the findings related to jurisdiction and did not delve into the issue of spares/consumables under the original notification.

In conclusion, the Tribunal dismissed the appeal, emphasizing the importance of interpreting laws based on their original form and upholding the jurisdiction of the authorities who conducted the original assessment. The decision highlighted the significance of considering spares as capital goods for a 100% EOU and clarified the jurisdictional aspects related to reassessment of goods under the relevant notification.