Territorial jurisdiction for excise notices requires authority over the manufacturing unit; a notice issued without it is void.

CESTAT New Delhi held that proceedings to determine duty liability and area-based exemption for a manufacturing unit must be initiated by officers having territorial and statutory jurisdiction over that unit. The appellant's unit was located in Uttarakhand, within the Meerut-I Commissionerate, while the show cause notice was issued by Central Excise officers in Rajasthan without shown authority under Rule 3(2) of the Central Excise Rules, 2002. Because the jurisdictional defect went to the root of the proceedings, it could be examined even if not raised earlier. The notice and all consequential proceedings were therefore void, unsustainable, and the appeals were allowed.

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Issues: Whether the show cause notice and consequent proceedings were without jurisdiction because the appellant's unit was located in Uttarakhand and the notice was issued by Central Excise officers in Rajasthan.

Analysis: The appellant unit was situated at Pant Nagar, Uttarakhand and fell within the jurisdiction of Meerut-I Commissionerate. The officers at Sikar, Rajasthan were not shown to have any legal authority under Rule 3(2) of the Central Excise Rules, 2002 to initiate proceedings against that unit for determining duty liability or eligibility to area based exemption. The Tribunal also noted that the objection went to the root of the legality of the proceedings and could be examined even if not raised earlier. Since the allegation was that the goods were not manufactured by the Uttarakhand unit, any duty liability could arise only against the actual manufacturer, who had not been identified.

Conclusion: The show cause notice and all proceedings based on it were held to be without jurisdiction and unsustainable, and the appeals were allowed.

Ratio Decidendi: Proceedings to determine duty liability of a manufacturing unit must be initiated by officers having territorial and statutory jurisdiction over that unit, and a notice issued by officers lacking such jurisdiction is void.

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