2001 (3) TMI 164 - AT - Central Excise

Summary

Issues involved: Alleged contravention of Central Excise Rules and demand for duty, jurisdiction of authority in issuing show cause notice to a 100% E.O.U., confiscation of seized granite slabs, penalty imposition, and compliance with Circulars related to E.O.Us.

Summary:
The case involved a Hundred per cent. Export Oriented Unit (E.O.U.) manufacturing polished granite slabs under Central Excise Tariff Act, 1985. The appellant's premises were visited, and granite slabs were seized, leading to allegations of contravention of various Central Excise Rules and duty evasion. The Commissioner's order included confiscation of seized slabs, penalty imposition, and duty demands, prompting the appeal.

Upon review, the Tribunal found that the authority's jurisdiction to issue a show cause notice to a 100% E.O.U. was in question, citing Circulars requiring referral to the Development Commissioner before adjudication. The Tribunal emphasized the importance of the proviso to Section 3(1) of the Central Excise Act, highlighting differences in levies for goods sold by E.O.Us in the Domestic Tariff Area (DTA) and the necessity for permission from the Development Commissioner for sales exceeding 25% of production.

Regarding confiscation, the Tribunal noted discrepancies in the Collector's findings and lack of evidence correlating seized slabs with those cleared from the factory, leading to the rejection of confiscation. The Tribunal also addressed discrepancies between RG.1 and Bank Statements, emphasizing that RG.1 entries are not statutory for E.O.Us and cannot solely establish clandestine clearance. Consequently, the Tribunal set aside the order, ruling against duty demands, confiscations, and penalties, finding no sufficient grounds for confiscation under Rule 209(2).

In conclusion, the Tribunal set aside the Commissioner's order and allowed the appeal, emphasizing compliance with Circulars, proper jurisdiction, and the specific regulatory framework applicable to E.O.Us in determining duty liabilities and confiscations.