2015 (12) TMI 659 - AT - Central Excise

Area based exemption under Notification NO.50/03-CE dt.10.6.03 at new premises after shifting of factory - no production was undertaken by the appellant at new address on or before 31.3.10 - Held that - It is seen that change of address has been intimated to district industries centre and district industries centre confirmed the change of address. When the information submitted by the appellant in respect of department s letter dt.9.7.10, and the documents furnished by the appellant are not disputed, chartered engineer s certificate has certified the existence of machinery and plant at the new premises and also the installed capacity, in our view, there is absolutely no ground to treat the appellant unit as having commenced their commercial production in July, 2010 and deny the exemption on this basis. Even in terms of Board s circular dated 17.2.12, an eligible unit physically shifting to new location would be eligible for exemption under Notification No.50/03-CE for residual period of exemption. When the department does not dispute that the appellant had commenced commercial production with effect from 30.3.10 from their old unit and has accepted their Form A return for period from April, 2010 to June, 2010 wherein certain production of LED lanterns has been declared, when the district industries centre has confirmed the shifting of factory to the new location and when the installation of plan and machinery at the new premises has been certified by chartered engineer and besides this, there is evidence of transportation of machinery to the new location, in our view, there is no justification to treat the appellant unit as having commenced commercial production after 31/3/10 and denying the exemption on this basis. Therefore, the impugned order is not sustainable. The same is set aside. - Decided in favour of assessee.

Summary

Issues:
1. Eligibility for duty exemption under Notification No.50/03-CE.
2. Denial of exemption due to factory shifting and commencement of commercial production.
3. Adjudication of show cause notices for duty demand, interest, and penalty.
4. Appeal against the Order-in-Original by the Joint Commissioner.
5. Arguments presented by both sides before the Tribunal.
6. Consideration of submissions and perusal of records by the Tribunal.
7. Analysis of the appellant's manufacturing operations, declaration, and shifting of factory.
8. Examination of documents submitted to the department and confirmation of factory shifting.
9. Evaluation of the chartered engineer's certificate and compliance with requirements.
10. Interpretation of Board's circular dated 17.2.12 regarding exemption eligibility.
11. Conclusion on the appellant's eligibility for duty exemption and commercial production commencement.
12. Decision to set aside the impugned order and allow the appeal.

Detailed Analysis:
1. The appellant sought duty exemption under Notification No.50/03-CE for manufacturing LED Lanterns chargeable to central excise duty. The dispute arose when the department raised concerns about the commencement of commercial production after the factory shifting in July 2010.

2. The department issued show cause notices for duty demand, interest, and penalty based on the appellant's factory relocation and alleged non-fulfillment of exemption criteria. The Joint Commissioner confirmed the duty demands, leading to an appeal by the appellant against the Order-in-Original.

3. The Commissioner (Appeals) upheld the Joint Commissioner's order, prompting the appellant to file an appeal challenging the decision. The Tribunal heard arguments from both sides, with the appellant emphasizing the timely commencement of production and compliance with exemption requirements.

4. The Tribunal reviewed the appellant's manufacturing activities, declaration filing, and factory relocation details. It noted the submission of necessary documents to the department, including a chartered engineer's certificate verifying machinery details and production capacity at the new premises.

5. Considering the appellant's compliance with information requests and confirmation of factory shifting by relevant authorities, the Tribunal found no justification to deny the duty exemption based on the factory relocation timeline. It referenced a Board's circular supporting exemption eligibility for physically shifting units.

6. The Tribunal concluded that the appellant had commenced commercial production before the specified date and fulfilled exemption criteria. As a result, the impugned order denying the exemption was deemed unsustainable, leading to its set aside and allowing the appeal.