2016 (8) TMI 1015 - AT - Central Excise

Maintainability - lack of jurisdiction of Central Excise officers in Sikar, Rajasthan for initiating action regarding the duty liability of the appellant unit which is located in Pant Nagar, Uttrakhand - Held that - in terms of jurisdiction of various officers as notified by Ministry of Finance in terms of power conferred by sub-Rule (2) of Rule 3 of Central Excise Rules, 2002 the appellant fall under the jurisdiction of Meerut-I Commissioner. The Assistant Commissioner Sikar who is falling under the jurisdiction of Commissioner at Jaipur in Rajasthan has no jurisdiction or power to initiate action against the appellant unit. It is seen that the appellant did not take this objection before the lower Authorities. However, since this is a basic legal issue affecting the very legality of the proceedings the same has to be examined by the Tribunal for a decision. Revenue is not able to place on record any legal authority empowering the officers working in Rajasthan to initiate proceedings against the appellant unit in Uttrakhand to determine the eligibility or otherwise of the appellant for a duty benefit. Confiscation in lieu of redemption fine - seizure of goods and truck - denial of exemption under Notification 50/2003-CE - appellants were not manufacturing the aerial bunched cables in their unit at Uttrakhand whereas procuring these items from elsewhere and carrying out some process of painting, numbering and putting inspection seal and clearing them without payment of duty from their Salodipura Godown in Rajasthan - Held that - it is noted that if the seized goods were not manufactured by the appellant in their Pant Nagar unit, the question of claiming or denying area based exemption on such goods does not arise. The duty demand, if any, should be against actual manufacturers of the said goods. The actual manufacturer has not been identified. Accordingly, the show cause notice and the proceedings consequent upon the said notice are without jurisdiction and, hence, the impugned order is not sustainable. - Decided in favour of appellant

Summary

Issues:
Jurisdiction of Central Excise officers in initiating action against the appellant unit located in Pant Nagar, Uttrakhand under area-based exemption notification.

Analysis:

The appeals were filed against an order regarding duty liability, confiscation of goods, and imposition of penalties on the main appellant engaged in the manufacture of aerial bunched cable. The officers of Central Excise in Sikar intercepted a truck carrying aerial bunched cables and initiated proceedings against the appellant for allegedly not manufacturing the goods in their Pant Nagar unit and clearing them without duty payment from a different location. The Original Authority confirmed a duty demand, confiscated goods, and imposed penalties, which were upheld by the Commissioner (Appeals), leading to the filing of the present appeals.

The main contention raised by the appellants was the lack of jurisdiction of the Central Excise officers in Sikar, Rajasthan, to decide the duty liability of the appellant unit located in Pant Nagar, Uttrakhand. The appellants argued that the Assistant Commissioner in Sikar had no jurisdiction over their unit falling under the Meerut I Commissionerate. On examination, it was found that the officers in Rajasthan did not have the authority to initiate proceedings against the appellant unit in Uttrakhand, as per the Ministry of Finance notifications. The Tribunal held that the lack of jurisdiction was a fundamental legal issue affecting the legality of the proceedings, rendering the impugned order unsustainable.

The investigation revealed that the goods were not manufactured in the Pant Nagar unit as claimed by the appellants, but were procured from Rajasthan. As a result, the question of claiming area-based exemption did not arise for the appellant unit. The Tribunal emphasized that any duty demand should be against the actual manufacturers of the goods, which were not identified in this case. Therefore, the show cause notice and subsequent proceedings were deemed without jurisdiction, leading to the allowance of the appeals on this ground.

In conclusion, the Tribunal found in favor of the appellants, highlighting the lack of jurisdiction of the Central Excise officers in Rajasthan to initiate proceedings against the appellant unit in Uttrakhand. The decision emphasized the importance of proper jurisdiction in legal proceedings and the necessity to identify the actual manufacturers for duty demands under area-based exemption notifications.