Territorial customs jurisdiction prevails where the import breach arose at the port of clearance, despite EOU administrative control arrangements.

A later statutory notification conferring territorial jurisdiction on the Commissioner of Customs covering Tuticorin prevailed over administrative control arrangements for the EOU. Because the imported capital goods were cleared at Tuticorin and the alleged breaches of customs and exemption conditions arose there, that commissioner could adjudicate the show cause notices and pass orders. A Board circular placing EOUs under the administrative control of the Central Excise Commissioner did not itself create adjudicatory power, and the earlier Larger Bench ruling did not override the later statutory conferment of jurisdiction. The objection to jurisdiction therefore failed.

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Issues: Whether the Commissioner of Customs, Trichy had jurisdiction to adjudicate the show cause notices and pass the impugned orders in relation to the imported capital goods cleared through Tuticorin port for the 100% EOU units.

Analysis: The imported goods were cleared at Tuticorin on the strength of bonds executed for multiple purposes, including warehousing, compliance with the exemption notification, and use of the goods for the sanctioned manufacturing activity. The violations alleged arose first at the port of import where the goods were cleared and where the customs conditions were breached. The Board circular placing EOUs under the administrative control of the jurisdictional Central Excise Commissioner did not confer adjudicatory power on that authority. The later notification under Section 4(1) of the Customs Act vested jurisdiction in the Commissioner of Customs, Tiruchirapalli for the relevant area, and Tuticorin was within that jurisdiction. The earlier Larger Bench ruling on EOU jurisdiction did not displace the later statutory conferment of authority on the Commissioner of Customs, Trichy.

Conclusion: The Commissioner of Customs, Trichy had jurisdiction to adjudicate the case, and the objection to jurisdiction failed.

Ratio Decidendi: Where a later statutory notification vests territorial jurisdiction in the customs commissioner covering the port where the cause of action arose, that commissioner can adjudicate violations of import and exemption conditions notwithstanding administrative control arrangements for the EOU.

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