COMMISSIONER OF CENTRAL EXCISE Vs. MOLEX INDIA LTD.

JUDGEMENT

(1.) The Revenue has preferred these appeals against the order passed by the Tribunal holding that the proceedings initiated under Rule 8 of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 (for short hereinafter referred to "the Customs Rules, 1996") by the Deputy Commissioner of Central Excise is one without jurisdiction as he is not a proper Officer of Customs under Section 28(1) of the Customs Act and accordingly set aside the show cause notices issued by such authority. The assessee is engaged in the manufacture of connectors, connector harnesses and parts thereof. They have been issued with the registration certificate under the Customs Rules, 1996. It was noticed by the Revenue that they had imported goods at concessional rate of duty under Notification No. 25/99, dated 28-2-1999 and used the same for manufacture of parts of connectors which are not specified in the list appended to the said notification. Thus, the assessee violated the provisions of the Customs Rules, 1996. Therefore, show cause notices came to be issued to the assessee by the Deputy Commissioner, Central Excise on 21-8-2001 requiring the assessee to show cause why differential duty for the period from 27-8-1996 to 30-4-2001 should not be recovered from them. The assessee on receipt of the said notice filed its objections contending that notice issued is one without jurisdiction and they substantiated their act on merits also. They also contended that the notice issued without prior approval of the Chief Commissioner of Customs is also without jurisdiction. Overruling the said objection, the original authority confirmed the demand made in the show cause notice. Aggrieved by the same, the assessee preferred an appeal to the Commissioner (Appeals) which also came to be dismissed. Aggrieved by the same, the assessee preferred an appeal to the CESTAT which allowed the appeal of the assessee holding that the show cause notices issued by the Deputy Commissioner of Central Excise is one without jurisdiction and accordingly, the same was set aside. Aggrieved by the said order, the Revenue preferred the appeal to the Apex Court, the Apex Court observed that as the appeal does not relate to the rate of duty or the value of the goods for the purpose of assessment, the appeals are not maintainable. Thereafter the revenue withdrew the appeal with a liberty to file an appeal before this Court. Accordingly, the present appeals are filed.

(2.) The learned Counsel for the Revenue assailing the impugned order contended that by virtue of the power conferred under Section 156 of the Customs Act, 1962, the Central Government has made the Rules. Any person who wants to have the benefit of the notification referred to in sub-rule (1) of Rule 2 has to obtain a registration from the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction over its factory. Once the assessee approaches the said authority and obtains registration and if there is any violation of the terms of the notification, then the aforesaid authority under Rule 8 can recover the amount equal to the difference between the duty leviable on such goods but for the exemption and that already paid, if any, at the time of import along with interest. Therefore, he submits that it is not open to the assessee who has submitted themselves to the jurisdiction of the said authorities to question the jurisdiction of the authorities to initiate action under the Rules. The entire scheme of the Rules, if properly understood, it is clear that the said authorities have authority to initiate action under Rule 8 and therefore, the finding recorded by the Tribunal is erroneous and requires to be set aside.

(3.) Per contra, the learned Counsel appearing for the assessee submitted that Section 28 of the Customs Act provides for recovery of duties not levied, short levied or erroneously refunded and a proper Officer is vested with the power to initiate proceedings for recovery of the same. The "Proper Officer" is defined under Section 2(34) of the Act. In the instant case, the Deputy Commissioner of Excise is not the proper Officer under the Customs Act and therefore, the proceedings initiated by him is one without jurisdiction as rightly held by the Tribunal. Therefore, he submits that no case for interference is made out.