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Issues: Whether EPABX systems cleared under CT-3 for supply to a 100% Export Oriented Unit were covered by Notification No. 123/81-C.E. and, if the goods were not accounted for as utilised in the EOU, whether the duty demand had to be initiated against the consignee's proper officer rather than the consignor.
Analysis: The disputed clearance was made under CT-3 pursuant to the notification scheme governing supplies to 100% Export Oriented Units. The notification and its appendix placed the responsibility for accounting of the goods on the officer in charge of the consignee EOU and contemplated action for recovery where the goods were not duly accounted for as utilised in manufacture. On the record, there was no material before the lower authorities to show how the supplied EPABX system was used in the EOU, but the notification procedure itself indicated that where such goods are not accounted for, the proper course is action by the officer in charge of the consignee factory. The distinction drawn in the cited decisions was held to be inapplicable because the present notification contained specific procedural provisions.
Conclusion: The supply on CT-3 was held to be in order, and the duty demand ought to have been made on the consignee through the proper officer.
Final Conclusion: The appeal failed, and the order setting aside the demand against the manufacturer was sustained.
Ratio Decidendi: Where a special exemption notification for supplies to a 100% Export Oriented Unit provides a specific accounting and recovery mechanism, liability for unaccounted goods must be pursued in accordance with that procedure against the consignee-side authority, not by treating the consignor as the primary defaulter merely because the exemption was availed at removal.
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