Evergreen Exim Pvt. Ltd., Ashish Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. these are applications for modification of tribunal's order no.7/225 to 227/wzb/2004c-i dt. 6.4.2004, which itself was an order giving further eight weeks time to deposit rs. 80 lakhs and report compliance on 15.7.2004. the applicants thereupon approached the hon'ble high court of gujarat seeking interim relief. the hon'ble high court quashed the stay order as well as the misc. order referred to above and directed the tribunal to hear the matter on the point of jurisdiction raised by the applicants . we do so accordingly.2. the plea of the applicants is that before the show cause notice was adjudicated the unit got converted into an unit working under sez scheme and therefore adjudication of the dispute can be done only by deputy commissioner sez and not the commissioner of central excise as was done in this case; that the point of jurisdiction could be raised at any time; that the commissioner of central excise can not adjudicate a case relating to sez as the latter is deemed to be a foreign territory; that a notice issued by an officer who is not authorized to do so has to be held void in its totality [2005 (118) ecr 21 (tr.lb); that the commissioner of central excise ahmedabad 111 in any case has no jurisdiction to decide the case; that the adjudicating authority should have taken up the adjudication only after a recommendation to the effect that recovery of duties was warranted was received from the development commissioner and the tribunal had not considered financial hardship.4. we observe that this point of jurisdiction was neither canvassed before the commissioner nor before the tribunal when the stay application was heard. the appeal memorandum also does not contain any contention relating to jurisdiction. after the tribunal has passed the stay order directing the applicant to deposit a certain sum of money the applicant in his modification application came out with the plea that the case should have been adjudicated by the development commissioner of sez. be that as it may, we notice that the various alleged offences referred in the order-in-original were committed when the applicant was an 100% eou. the disputed period is 24.5.2001 to 5.9.2001 the unit got converted into sez unit as per the certificate given by the office of the development commissioner kasez only on 12.10 2001. further the same officer on its letter dated 1.9.2002 wrote to the dy. commissioner of central excise gandhinagar stating that the deputy commissioner kasez will be responsible for recovery any duty fine penalty etc. from the party after adjudication of the show cause notice issued by commissioner of central & customs ahmedabad-ii. this clearly indicates that the permission to shift from 100% eou to an unit in sez was accorded only after it is understood by all concerned that the show cause notice would be adjudicated upon by the customs & excise department. the plea of jurisdiction is highly debatable in these circumstances. in deference to the hon'ble high court's direction we consider the issue of jurisdiction and are unable to persuade ourselves to conclude that the applicant made out a prima facie case on jurisdiction. the various other issues will be gone into when the appeal is taken up for final disposal.5. we therefore see no reason to modify our earlier stay order directing the applicants to deposit rs. 80 lakhs. the modification applications is rejected. however in the interest of justice we accord further 12 weeks time to deposit the said amount from today and report compliance on 18.4.2005.

Judgment:
1. These are applications for modification of Tribunal's order No.7/225 to 227/WZB/2004C-I dt. 6.4.2004, which itself was an order giving further eight weeks time to deposit Rs. 80 lakhs and report compliance on 15.7.2004. The applicants thereupon approached the Hon'ble High Court of Gujarat seeking interim relief. The Hon'ble High Court quashed the stay order as well as the misc. order referred to above and directed the Tribunal to hear the matter on the point of jurisdiction raised by the applicants . We do so accordingly.

2. The plea of the applicants is that before the show cause notice was adjudicated the unit got converted into an unit working under SEZ scheme and therefore adjudication of the dispute can be done only by Deputy Commissioner SEZ and not the Commissioner of Central Excise as was done in this case; that the point of jurisdiction could be raised at any time; that the Commissioner of Central Excise can not adjudicate a case relating to SEZ as the latter is deemed to be a foreign territory; that a notice issued by an officer who is not authorized to do so has to be held void in its totality [2005 (118) ECR 21 (Tr.LB); that the Commissioner of Central Excise Ahmedabad 111 in any case has no jurisdiction to decide the case; that the adjudicating authority should have taken up the adjudication only after a recommendation to the effect that recovery of duties was warranted was received from the Development Commissioner and the Tribunal had not considered financial hardship.

4. We observe that this point of jurisdiction was neither canvassed before the Commissioner nor before the Tribunal when the stay application was heard. The appeal memorandum also does not contain any contention relating to jurisdiction. After the Tribunal has passed the stay order directing the applicant to deposit a certain sum of money the applicant in his modification application came out with the plea that the case should have been adjudicated by the Development Commissioner of SEZ. Be that as it may, we notice that the various alleged offences referred in the order-in-original were committed when the applicant was an 100% EOU. The disputed period is 24.5.2001 to 5.9.2001 the unit got converted into SEZ unit as per the certificate given by the office of the Development Commissioner KASEZ only on 12.

10 2001. Further the same officer on its letter dated 1.9.2002 wrote to the Dy. Commissioner of Central Excise Gandhinagar stating that the Deputy Commissioner KASEZ will be responsible for recovery any duty fine penalty etc. from the party after adjudication of the show cause notice issued by Commissioner of Central & Customs Ahmedabad-II. This clearly indicates that the permission to shift from 100% EOU to an unit in SEZ was accorded only after it is understood by all concerned that the show cause notice would be adjudicated upon by the Customs & Excise Department. The plea of jurisdiction is highly debatable in these circumstances. In deference to the Hon'ble High Court's direction we consider the issue of jurisdiction and are unable to persuade ourselves to conclude that the applicant made out a prima facie case on jurisdiction. The various other issues will be gone into when the appeal is taken up for final disposal.

5. We therefore see no reason to modify our earlier stay order directing the applicants to deposit Rs. 80 lakhs. The modification applications is rejected. However in the interest of justice we accord further 12 weeks time to deposit the said amount from today and report compliance on 18.4.2005.