CCE Vs. PALLAVA GRANITE INDUSTRIES

JUDGEMENT

(1.) THE respondents in this appeal of the Revenue are a 100% EOU engaged in the manufacture of monuments [Heading 68.07 of the CETA Schedule]. The officers of Central Excise (Preventive) visited the unit on 18.2.1998 and conducted scrutiny of records and verification of physical stock of goods. They found that an excavator which had been received in the factory in October 1990 and re -warehoused in the next month was in a totally dilapidated condition with its engine, wheels, etc. missing. The excavator was seized by the officers. It was also noticed that a Mitsubishi Forklift Truck imported in June 1998 and a Canon fax machine imported in January 1992, in terms of Notification No. 3/81 dated 9.2.1981, were not available in the factor, which fact was also recorded in the same mahazar whereunder the excavator was seized. It was further noticed that the respondents had executed a bond covering receipt of the excavator under Chapter X Procedure [under Rule 192 of the Central Excise Rules, 1944] and had also furnished bonds for the duty -free importation of the forklift truck and fax machine under the above notification. A statement of the production manager of the unit, was recorded later. From the results of. these inquiries, it appeared to the department that the respondents had removed bonded goods without payment of duty or following statutory procedure. Accordingly, a show -cause notice was issued to the party for recovery of Central Excise duty of Rs.3,30,750/ - Customs duty of Rs. 2,47,936/ - and Additional Customs Duty of Rs.79,449/0 under the relevant provisions of law. In their reply, the party stated that the excavator was in a fully scrapped condition and that the forklift truck and fax machine, which had been sent to their head office for some repairs and received back, were very much available in the factory. The Additional Commissioner, in adjudication of the dispute, confirmed the above demands of duties against the party and imposed penalties on them, besides confiscating the excavator with option for redemptions. The first appellate authority allowed the appeal filed by the party against the decision of the lower authority. Hence the present appeal of the Revenue.

(2.) LEARNED Commissioner (Appeals) relied on the Board's Circulars No. 21/95 -Cus. dated 10.3.95 and No. 122/95 -Cus. dated 28.11.95 and a few decisions of the Tribunal, to hold that the order of adjudication without clearance from the Board of Approval or the Development Commissioner was not sustainable. This view taken by the lower appellate authority has been contested by the appellant on the ground that the instructions contained in Circular No. 122/95 -Cus. are squarely applicable to a case of illicit removal and improper accountal and therefore prior intimation or reference to Board of Approval/Development Commissioner is not required. It is also contended that there is no mandatory provision in the Central Excise Act or in the Customs Act for reference to Development Commissioner before issuance of show -cause notice to a 100% EOU. Learned SDR has reiterated these grounds of the appeal. Learned consultant has endeavoured to support the impugned order, mainly on the strength of the Tribunal's decision in Kuntal Granites (P) Ltd. v. Commissioner .

(3.) FOR the reasons noted above, the impugned order is sustained and this appeal is dismissed.