Modvat adjudication jurisdiction upheld despite monetary limit objection; administrative instructions cannot override statutory authority.

Administrative instructions limiting an Assistant Collector's adjudication power by monetary threshold were treated as lacking statutory basis, so they could not defeat jurisdiction over a Modvat credit demand under Rule 57-I. The Tribunal also noted departmental clarification that Modvat matters not involving the longer limitation period could be adjudicated by the Assistant Commissioner without any monetary constraint. On that reasoning, the jurisdictional objection was rejected and the Commissioner (Appeals) was found to have erred in setting aside the Assistant Collector's orders.

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Issues: Whether the Assistant Collector lacked jurisdiction to adjudicate the Modvat credit demand merely because the duty demand exceeded Rs. 50,000, and whether the Commissioner (Appeals) was justified in setting aside the adjudication and remanding the matter.

Analysis: The demand arose from alleged irregular availment of Modvat credit and was proceeded with under Rule 57-I of the Central Excise Rules, 1944. The Tribunal relied on its earlier view that the administrative instructions restricting adjudication by an Assistant Collector to matters up to a particular monetary limit were not founded in any statutory provision. It also noted the departmental clarification that Modvat matters not involving the longer period of limitation could be adjudicated by the Assistant Commissioner without any monetary constraint. On that basis, the finding of lack of jurisdiction recorded by the Commissioner (Appeals) could not be sustained.

Conclusion: The jurisdictional objection was rejected and the Commissioner (Appeals) was held to have erred in setting aside the Assistant Collector's orders.

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