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2009 (11) TMI 553 - HC - Central Excise100% EOU misdeclaration of imports jurisdiction of Central Excise Departemetn to issue SCN - goods were imported at Bombay Port - Held that - Department has brought to the notice of the Court Circular No. 88/98-Cus., dated 2-12-1998 issued by the Government of India, Ministry of Finance, Department of Revenue which provides for degree of supervision of the department officers on movement of raw materials, components, finished goods and manufacturing process and accounting of the same in an EOU. Clause (iii) of the said Circular is with respect to movement of non-duty paid goods, which empower the officer incharge of the sending EOU and receiving units shall watch movements and to see whether the goods have been actually received in the unit or not. - Excise Department is vested with the powers of Customs as well - It cannot be said that notices are issued without jurisdiction
Issues:
Challenging jurisdiction of Excise and Customs Department, Alleged improper examination of imported goods, Discrepancy in goods description, Jurisdiction of Customs and Excise Department, Validity of show-cause notice, Circular on supervision of EOU operations. Challenging jurisdiction of Excise and Customs Department: The Special Civil Application challenged a notice by the Excise and Customs Department Vapi. The petitioner company applied for conversion of its factory into 100% EOU for manufacturing and exporting plastic granules. The Secretariat for Industrial Approval granted permission for this conversion. The petitioner imported plastic and nylon waste, which were examined by the Customs Authorities at Mumbai Port. However, the Central Excise Department officers seized the goods at the factory premises, leading to the issuance of a show-cause notice by the Commissioner of Central Excise and Customs, Surat. The petitioner argued that the notice was without jurisdiction, citing Supreme Court decisions. The respondents contended that the inspection at Vapi revealed discrepancies in the goods, justifying the seizure. Alleged improper examination of imported goods: The petitioner claimed that the Customs Authorities at Bombay Port incorrectly examined the imported goods, stating that they did not match the description in the Letter of Permission. The respondents argued that the superficial examination at Mumbai Port was inadequate, and a detailed examination at Vapi revealed that the goods did not align with the permitted imports. They emphasized that the petitioner's permission did not cover certain waste types, and the inspection at Mumbai Port did not absolve them of duty liability. Discrepancy in goods description: The discrepancy in goods description arose when the description on some Bills of Entries did not match the factory visit findings. The respondents argued that the detailed examination at Vapi was crucial in determining the actual nature of the goods imported, which differed from what was permitted. They stressed that the petitioner needed to address these discrepancies by responding to the show-cause notice. Jurisdiction of Customs and Excise Department: The respondents contended that the Excise Department had jurisdiction to inspect the goods and seize them based on a reasonable belief that the items were not as declared. They highlighted that the permission granted by the Special Investigation and Intelligence Branch at Mumbai Customs Port did not absolve the petitioner from complying with Excise Department regulations. The Court noted that the Excise Department's powers extended to Customs matters, justifying the actions taken. Validity of show-cause notice: The petitioner challenged the jurisdiction of the show-cause notice issued by the Commissioner of Central Excise and Customs, Surat. The respondents argued that the notice was valid, as the detailed examination at Vapi revealed discrepancies in the imported goods, necessitating further action by the authorities. The Court emphasized that if the petitioner had a defense, it should be raised before the issuing authorities and that the notices were not without jurisdiction. Circular on supervision of EOU operations: The Court considered Circular No. 88/98-Cus., which outlined the supervision of EOU operations by department officers. The Circular empowered officers to monitor the movement of goods and ensure their receipt at the designated unit. The Court decided not to entertain the petition, advising the petitioner to address the issues raised in response to the show-cause notice. By analyzing the issues of jurisdiction, examination of goods, discrepancy in goods description, authority of Customs and Excise Department, validity of the notice, and the relevant Circular, the Court provided a detailed assessment of the case, emphasizing the need for the petitioner to engage with the authorities to address the discrepancies identified during inspections and respond to the show-cause notice appropriately.
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