Mandatory reference procedure for 100% export oriented units required before adjudication; order set aside and remanded.

In proceedings concerning removal of goods without payment of duty by a 100% export oriented unit, the adjudicating authority was required to first follow the prescribed procedure by referring the matter to the Development Commissioner or Board of Approval before passing an order. As that procedure had not been adopted, the adjudication order could not stand in its present form. The order was therefore set aside and the matter remanded for fresh decision in accordance with law after following the prescribed procedure and giving the party an opportunity of hearing.

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Issues: Whether the adjudication order passed against a 100% export oriented unit without first referring the matter to the Development Commissioner was sustainable, and what relief should follow.

Analysis: The matter was decided on a limited issue. It was noted that, in cases concerning removal of goods without payment of duty by a 100% export oriented unit, the adjudicating authority must follow the prescribed procedure by referring the matter to the Development Commissioner or Board of Approval, as required by the governing procedure recognised in prior tribunal decisions. Since that course had not been adopted before adjudication, the order could not stand in its present form.

Conclusion: The adjudication order was set aside and the matter was remanded to the adjudicating authority for fresh decision in accordance with law after following the prescribed procedure and affording opportunity to the party.

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