By TIOL News Service

CHENNAI, DEC 09, 2014: THE appellant assessee, debonded its unit from 100% EOU status on 31.3.2003, is engaged in the manufacture of shrimp/prawn feed. It appears that the assessee while clearing the goods, viz., prawns and shrimps feed in the DTA during the month of March, 2003, had availed certain amount of cenvat credit and adjusted the cenvat credit amount towards payment of duty for clearances effected during the month of March, 2003. The credit availed and utilised by the assessee as 100% EOU unit for the clearances effected from March, 2003 appears to be contrary to Rule 17 of Central Excise Rules 2002 as it does not have provision to adjust the cenvat credit by the 100% EOU. Therefore, show cause notice was issued by the jurisdictional Superintendent of Central Excise.

The notice was adjudicated by the Commissioner of Customs. On appeal filed by the assessee, Tribunal remanded the matter to the Commissioner of Central Excise accepting the plea of the appellant that the Commissioner, Customs has no jurisdiction after debonding. The assessee challenged the order of Tribunal on the ground that under Section 129B of the Customs Act, 1962, Tribunal cannot remand the matter to an authority other than which passed the impugned order.

After hearing both sides, the High Court held:

A conjoint reading of Section 129B with Section 2(1) of the Customs Act makes it clear that the order should be passed only by a competent authority who has jurisdiction to pass an order and therefore, the Tribunal, if it found an error in the order passed by an authority, is justified to remand the case back to the competent authority. Section 129B does not restrict the power of the Tribunal to remand the matter back to the competent authority having given a ruling thereon.

The show cause notice was issued by the Superintendent of Central Excise, which Department had jurisdiction to initiate proceedings and the order of adjudication on being set aside by the Tribunal for lack of jurisdiction, the original show cause notice survives and therefore, that has to be adjudicated only by a competent authority in terms of Section 2(1) of the Customs Act. When such being the case, the competent adjudicating authority alone has jurisdiction to adjudicate the issue on the subsisting show cause notice. There is no error in the order of the Tribunal.

(See 2014-TIOL-2170-HC-MAD-CUS)