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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, BANGALORE
G.A. BRAHMA DEVA, S.S. Sekhon, JJ.
Kuntal Granites (P.) Ltd. -Appellant
Versus
Collector of Central Excise, Belgaum -Respondent
Final Order No. 332/2001 Appeal No. E/R-680/96, 332 of 2001, 680 of 1996
Decided On : 01-03-2001
Per S.S. Sekhon :
The appellant is a Hundred percent Export Oriented Unit(E.O. Unregistered with the Central Excise and engaged in the manufacture of polished granite slabs falling under Ch.H No 6807 of Central Excise Tariff Act, 1985. They are also registered under the Customs Act 1962 and had set up the unit in June 1991.
2. On 16.10.92, the Preventive Officers visited the premises and on verification of stocks/records and seized 77Nos. of Granite slabs. The appellants vide their letter dt. 7.12.96, reconciling the stocks explained that 181 slabs polished/unpolished were removed from the factory (licensed premises) and were lying adjacent to their office, in another shed known as Jiglur Service Centre. The same were seized on 18.12.92, 78 tiles were seized on 24.12.92 from the factory.
3. A notice was issued on 15.4.93,allegingcontraventionofRule9(l), 110-B, 100-D& 100-E alleging -
(a) 77Nos. of Granite slab (measuring 265.485 sq meters under seizure on 16.10.92 and 194 slab (166 unpolished & 28 polished) cleared without payment of duty from the factory and seized on 18.12.92 and 78Nos. granite slabs (SIC) (it should be Tiles), measuring 11.89 sq. mtrs. under seizure should not be confiscated under Rule 209 of the Central Excise Rules.
(b) Central Excise Duty amountingtoRs,2,19,994.30on 92.82 Sq.mtrs of slabs cleared without following the Central Excise Procedure should not be demanded and recovered under Rule 9 (2) of the Rules, as they had suppressed the production and clearance of this quantity with intention to evade.
(c) Central Excise Duty of Rs. 5,54,514/- on 181 slabs removed during the period 8.9.92 to 24.9.92 should not be demanded and recovered under Rule 9 (2).
(d) Central Excise Duty amounting to Rs. 1,06,441.96 on 44.91 Sq. Mtrs. of slabs out of 56.8 sq. mtrs which were cleared for exhibition and not returned should not be demanded under Rule 9 (2).
(e) Penalty not be imposed under Rule 9 (2) & 209 and confiscation of land and buildings not be ordered under Rule 209 (2).
4. The Commissioner vide order dt. 15.3.96, ordered the confiscation of 77 slabs seized on 16.10.92 under Rule 209 and ordered the appropriation of the Bond of Rs. 5000/- executed at provisional release. The 194 slabs measuring 333.922 sq. mtrs. seized on 18.12.92 and 78 Nos. on 24.12.92 were ordered to be confiscated under the provisions of Rule 209. A penalty of Rs. 1,50,000/-was imposed for contravention of Rule 9 (2) & 209, confiscation of plant & machinery under 209 (2) was ordered and a redemption fine of Rs. One Lakh was imposed; Duties as demanded were confirmed. The present appeal is against this order.
5. We have heard both sides and considered the material and find -
(a) The primary objection of the appellants about the jurisdiction of the authority to issue show cause notice by the Collector incharge on a 100% E.O.U. has a force upheld by the Board vide their instructions on the demands for duties of . Customs, if export objections are not met. These instructions provide for issuance of show cause notice by Revenue, but also stipulate that adjudication should be proceeded with, only after the Development Commissioner in-charge of EOUs have been intimated about the violation. These instructions issued by Circular No. 21/95-Cus dt 10.3.95 and 122/95 dt. 28.11.95 are relevant and have been relied upon by the Tribunal and confiscation orders set aside Vishal Foot Wear Ltd. 1999 (35) RLT 45=1999 (114) ELT 60 (T), following the same, we find, the commissioner was bound to follow the Circular dt. 10.3.95 and 28.11.95 and not proceeded to adjudicate the matter without referring the same to the Board/Development Commissioner, or at least to have considered these orders and thereafter come to his findings regarding his jurisdiction.
(b) We find proviso to Section 3 (1) of the Central Excise Act 1944, reads as -
"Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured, -
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