SANJIDA FABRICS Vs. COMMISSIONER OF CUSTOMS, AHMEDABAD

JUDGEMENT

(1.) THE brief facts of the case are that one M/s. Sanjida Fabrics, a 100% EOU who are engaged in the manufacture of ready made garments had received some fabrics from a SEZ unit claiming exemption under Notification No. 53/97 and thereafter subsequently diverted it to local market without payment of duty and without obtaining permission of the Customs officer. One truck loaded with such fabrics was intercepted by the Customs officer and the driver could not produce any documents like invoice, challan, bill of entry, etc. and stated that the goods were loaded from the premises of M/s. Sanjida Fabrics. The goods were accordingly seized and in follow up action taken, unit of M/s. Sanjida Fabrics was visited and shortages in the stock of imported fabrics was found. Accordingly a show cause notice was issued demanding duty on the shortages so detected and proposing confiscation of the seized goods under Sections 111(j) and (o) of the Customs Act, 1962 and penalties under Sections 114A and 112(a) and (b) on the company, the owner of the truck and its employees and on one Shri Ghadiyali, a yarn broker who arranged the supply of fabrics from one 100% EOU to the other.

(2.) THE present appeals are filed by M/s. Sanjida Fabrics and Shri Ghadiyali, the yarn broker.

(3.) SHRI Shroff admitted the shortages in the warehouse of 100% EOU but raised a preliminary objection that the Commissioner of Customs who had adjudicated the case, had no jurisdiction to adjudicate the same in view of the fact that duty has been demanded under Section 72 of the Customs Act for which the proper officer is the Central Excise Officer Incharge of the 100% EOU with whom the bond was executed. In support of this, he relied upon the decision of the Larger Bench in the case of Ferro Alloys Corporation Ltd. v. Collector reported in 1995 (77) E.L.T. 310 wherein it was held that officer incharge of the 100% EOU only has jurisdiction to demand duty. The above decision was also followed by the Tribunal in the case of Raju Fabrics v. CC, Ahmedabad reported in 2004 (166) E.L.T. 468.