2011 (6) TMI 342 - AT - Central Excise

Jurisdictional dispute on SEZ clearances: Commissioner's order challenged over Customs matters

The Tribunal reviewed the jurisdiction of the Commissioner (Appeals) to decide an appeal concerning SEZ clearances to a 100% EOU. The Commissioner's order ... SEZ clears the goods to another 100% EOU - At the time of de-bonding of SEZ unit in the year 2007, it was found by the Revenue that re-warehousing certificate in respect of the above goods cleared under shipping bill dated 07.09.01 was not received by the consignee EOU. - Held that:- The matter to be remanded to Commissioner (Appeals) for deciding his jurisdiction to decide the appeal, in the light of the Board s Circular No.16/2004-Cus. dated 16.02.2004 and decision in the case of Bharti J. Gandhi Vs. UOI (2009 (12) TMI 439 - GUJRAT HIGH COURT). Revenue's appeal is allowed by way of remand. Issues:1. Jurisdiction of Commissioner (Appeals) to decide the appeal.2. Compliance with formalities for SEZ clearances to 100% EOU.3. Delay in calling for proof of re-warehousing certificate.4. Applicability of Circulars and High Court judgments in determining jurisdiction.Jurisdiction of Commissioner (Appeals) to decide the appeal:The appeal arose from an order passed by the Commissioner (Appeals), Central Excise & Customs, Surat, which set aside demands and penalties imposed on a trading unit located in a Special Economic Zone (SEZ) for non-receipt of re-warehousing certificate by the consignee 100% Export Oriented Unit (EOU). The Revenue challenged the jurisdiction of the Commissioner (Appeals) to decide the appeal, arguing that he lacked appellate jurisdiction over Customs matters. The Tribunal noted conflicting interpretations regarding jurisdiction and remanded the matter for the Commissioner (Appeals) to decide the contested issue. The decision highlighted the need for a thorough examination of jurisdiction based on relevant Circulars and legal provisions.Compliance with formalities for SEZ clearances to 100% EOU:The case involved the supply of synthetic grey fabrics by a trading unit in an SEZ to a 100% EOU under a deemed export basis. The Revenue alleged non-compliance with re-warehousing formalities when the SEZ unit de-bonded in 2007. The Commissioner (Appeals) set aside the demands, emphasizing that clearances to EOUs must follow import procedures, with the EOUs responsible for compliance. Reference was made to a 1994 Circular requiring proof of re-warehousing within 90 days of clearance. The judgment highlighted the importance of following due procedures in SEZ clearances to EOUs.Delay in calling for proof of re-warehousing certificate:The Revenue's show cause notice for duty demand and penalties was issued after a significant delay of more than six years from the clearance date in 2001. The Commissioner (Appeals) deemed the delay unfair, citing a Circular mandating prompt action within 90 days of clearance. The judgment emphasized the impact of undue delays on enforcement actions and the importance of timely verification of re-warehousing compliance to prevent unjust demands on the parties involved.Applicability of Circulars and High Court judgments in determining jurisdiction:The Tribunal considered Circulars and a High Court judgment cited by both parties to support their arguments on the jurisdiction of the Commissioner (Appeals). The judgment highlighted the need to assess the relevance and applicability of legal precedents and Circulars in determining jurisdictional issues. The decision underscored the importance of legal interpretations and precedents in resolving jurisdictional disputes effectively, ensuring clarity and consistency in appellate proceedings.