Development Commissioner reference required before adjudicating duty demand against a 100% export-oriented unit.

A duty demand against a 100% export-oriented unit for alleged non-availability of imported capital goods and shortage of raw material could not be sustained without first following the procedure requiring reference to the Development Commissioner. The CESTAT noted its earlier view that disputes involving a 100% EOU must be adjudicated only after such reference, and found that the impugned order had not complied with that process. The order was therefore set aside and the matter remanded to the Adjudicating Authority to follow due procedure and decide the case in accordance with law, without any expression of opinion on the merits.

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Issues: Whether the duty demand against a 100% export-oriented unit for alleged non-availability of imported capital goods and shortage of raw material could be sustained without following the procedure requiring reference to the Development Commissioner.

Analysis: The appellants, a 100% EOU, had imported capital goods and obtained indigenous raw material under exemption notifications. The Tribunal noted its earlier view that disputes involving a 100% EOU were to be adjudicated only after referring the matter to the Development Commissioner, and found that the impugned order had not followed that course.

Conclusion: The impugned order was set aside and the matter was remanded to the Adjudicating Authority to follow the due procedure and decide the case in accordance with law. No opinion was expressed on the merits.

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