2008 (9) TMI 829 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 50/03-C.E. regarding duty exemption eligibility for goods cleared from a unit located in an Industrial area, specifically Khasra No. 174 of Village Raipur, Uttarakhand.

Analysis:
The case involved a dispute over the eligibility of duty exemption under Notification No. 50/03-C.E. for goods cleared from a unit located in an Industrial area, particularly Khasra No. 174 of Village Raipur, Uttarakhand. The Appellants had set up a plant for manufacturing television sets and air conditioners in the specified area. The Industrial Development Department of Uttarakhand Government notified Khasra No. 174 as an "Industrial area" only on 10-11-04, while the Appellants started commercial production earlier. The Commissioner held that the Appellants were eligible for exemption only from 10-11-04 onwards, leading to duty demands, interest, and penalties imposed on the Appellants and their partners.

The Appellants contended that all conditions specified in the notification were met, making them eligible for exemption from the declared date. They argued that the absence of a specific requirement in the notification regarding the State Government's notification of the Industrial area meant that the exemption should not be denied based on this. They cited relevant judgments emphasizing the need to interpret exemption notifications based on their wording without adding conditions beyond what is explicitly stated.

The Respondent, on the other hand, argued that the exemption was only available to units in Industrial areas notified by the State Government, excluding those not officially recognized. The Tribunal carefully considered both arguments and concluded that the notification did not mandate State Government notification for proposed Industrial areas to be eligible for duty exemption. Relying on previous judgments and the principle of interpreting exemption notifications based on their language, the Tribunal ruled in favor of the Appellants.

Therefore, the Tribunal set aside the impugned order, stating that the units located in the specified Khasras of Villages mentioned under the "Proposed Industrial Area/Estate" in Annexure II to Notification No. 50/03-C.E. would be eligible for duty exemption if they met other conditions of the notification, regardless of the State Government's notification status for those areas. The appeals were allowed, and the Appellants' position was upheld based on a strict interpretation of the notification's provisions.