Per Justice U.L. Bhat :

This is an appeal filed by the Collector of Customs, Jaipur, on the direction of the Board, under Section 129-D(1) of the Customs Act, 1962 passed by the Collector of Customs (Judicial), Jaipur.

2. Respondent set up a 100% export-oriented-unit at Bhilwara for manufacture of micromised mica powder availing benefit of Customs Notification 13/81 (allowing exemption from duty on capital goods, raw materials etc. imported for setting up 100% EOU on condition of export of the goods produced) and Excise Notification 123/81 (granting parallel exemption regarding excise duty on capital goods etc. purchased in the domestic market). Respondent imported capital goods etc. of the value of Rs. 17.53 lacs an purchased indigenous goods valued at Rs. 9.75 lacs for the purpose of setting up the unit. Production started in 1984 by manufacture and export stopped some time after September, 1987. This is seen from the respondent's letter dated 10.5.88 addressed to the department. The factory was in bonded area. The Ministry of Commerce, Government of India allowed debonding of goods on condition of payment of the requisite customs duty and penalty on the imported goods and excise duty on the unused raw materials etc. and payment of 10% of the value of imported capital good as penalty. These amounts were not paid.

3. Meanwhile, RIICO Ltd. (Rajasthan State Government of India) took over possession of the factory premises and the goods in the factory on account of the respondent's failure to repay the loan taken from them. Thereafter, the Customs department seized all the goods found in the factory premises. The show cause notice dated 1.3.90 was issued to the respondent and RIICO Ltd. proposing demand of the duties and penalty amount and proposing confiscation of the seized goods. Subsequently, RIICO Ltd. entered into an agreement with M/s Pesticides India Ltd. (for short, PIL) for transfer of the unit to PIL. PIL informed the adjudicating authority of their willingness to pay all the dues. Respondent did not pay all the dues. Respondent did not raise any legal objection to the show cause notice expect to say that RIICO Ltd. was responsible. The Ministry of Commerce had permitted the respondent to withdraw from EOU Scheme on payment of all the dues. No payment had been made by any of the parties in question.

4. The adjudicating authority passed the impugned order holding that no penal action was called for subject to the condition that PIL paid the amount due within one month from the date of receipt of the order and allowing the finished goods under Inventory No. 3 to the panchanama to be cleared after payment of appropriate Central Excise duty. This order is now challenged by the department.

5. There is no dispute at the Bar that after passing of the adjudication order, PIL had withdrawn the offer to take over the unit and to discharge the liabilities. The impugned order is defective inasmuchas the adjudicating authority did not pass any order in the matter of the confiscation proposed in the show cause notice, nor did the adjudicating authority confirming the demand against the respondent or anyone of the parties' concerned. So far as the department is concerned the liability is that of the respondent. It appears to us that the adjudicating authority should have passed an order of confiscation allowing redemption and also confirming the demand against the respondent. It is in these circumstances the department seeks remand of the matter. We are satisfied that the prayer made is quite legitimate.

6. Learned counsel for the respondent raised a contention that the appeal is barred by time. The appeal proceeding is initiated under Section 129-D(4) of the Customs Act on review by the Board. The Board is allowed one year's period to pass the review order and the adjudicating authority is allowed three months further time to file the proceedings under Section 129-D(4). Respondent agrees that if this appeal is treated as one under S