2015 (12) TMI 1619 - AT - Central Excise

Denial of exemption under N/N. 49/50-2003-C.E., dated 10-6-2003 - area based exemption - whether the appellant has commenced the commercial production on or before 31-3-2010 to avail the benefit of Notification No. 49/50-2003-C.E., dated 10-6-2003 or not? - Held that - the appellant has cleared the goods on commercial consideration and the production of goods is not in dispute. The appellant has sold the goods against consideration therefore, the clearance made by the appellant qualifies the definition of commercial production. The appellant has commenced the commercial production on 31-3-2010, therefore, we hold that the appellant is entitled for the benefit of Notification No. 49/50-2003-C.E., dated 10-6-2003. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of area-based exemption under Notification No. 49/50-2003-C.E.
2. Commencement of commercial production by the appellant on or before 31-3-2010.

Analysis:
1. The appellant appealed against the denial of the area-based exemption under Notification No. 49/50-2003-C.E. The appellant filed for the exemption effective from 31-3-2010 but faced issues as construction activities were ongoing at the premises during a visit by jurisdictional officers. Allegations were made that the appellant failed to commence commercial production by the specified date, leading to show cause notices and duty demands for the period in question. Both lower authorities upheld the denial of exemption, prompting the appellant to appeal.

2. The central issue revolved around whether the appellant had indeed started commercial production by 31-3-2010. The appellant argued that they had met the necessary conditions for exemption, citing certification by the Director of Industries and the Department of Excise and Taxation. The appellant contended that despite no production on 31-3-2010, the department's duty demand implied acknowledgment of production commencement. The appellant also highlighted a precedent from the Hon'ble Guwahati High Court to support their claim.

3. The opposing argument emphasized that trial production on 31-3-2010 did not constitute commercial production, especially considering a crucial machinery part crossing a taxation barrier late in the day. The adjudicating authority's decision to deny exemption was supported, reiterating findings from the impugned order.

4. The Tribunal analyzed the evidence and legal precedents presented. Referring to relevant statutes and previous judgments, the Tribunal concluded that the appellant's activities on 31-3-2010 met the criteria for commencing commercial production. The decision was reinforced by the appellant's sale of goods against consideration, aligning with the definition of commercial production as per legal interpretations.

5. Ultimately, the Tribunal ruled in favor of the appellant, holding that the appellant had indeed commenced commercial production on 31-3-2010, entitling them to the benefits under Notification No. 49/50-2003-C.E. Consequently, the duty demands for the period in question were set aside, and the appeals were allowed with any necessary consequential relief.