2018 (1) TMI 1465 - AT - Central Excise

Area based exemption - N/N. 50/2003 dated 10-6-2003 - requirement to make the declaration by 31-12-2009 (last date) to claim the benefit - Rejection of benefit on the ground that the appellant has made such a declaration only after on 25-9-2014 (after four years) - Held that - It appears that the appellant has filed the declaration belatedly to get the benefit of Notification 50/2003 retrospectively which is not permissible - The requirements of Notification No. 50/2003 is that the verification will have to be made on the spot at the time of starting of commercial production - The said requirements are mandatory. After the period of more than four years, it cannot notify and verified. The benefit under Notification No. 50/2003 cannot be granted to the appellant retrospectively - benefit rightly denied. CENVAT Credit - Held that - When the appellant is paying the duty for the period under consideration the appellant is entitled for Cenvat credit as per law subject to the satisfaction of conditions and verification - Hence, for allowing the Cenvat credit for the period under consideration, the matter is remanded to the Original Authority to examine the same on merit and allow the claim. Appeal allowed in part by way of remand.

Summary

Issues:
Claim for benefit under Notification No. 50/2003 filed belatedly - Condonation of delay - Requirement of verification for benefit - Applicability of Notification retrospectively - Cenvat credit entitlement.

Analysis:
The appeal was filed against Order-in-Original No. 28/2015 dated 15-9-2015. The appellant had established a pharmaceutical products factory in Uttarakhand and was required to make a declaration by 31-12-2009 to claim the benefit of Notification No. 50/2003 dated 10-6-2003. However, the declaration was made only on 25-9-2014, four years after the deadline. The department denied the benefit of the notification, demanded duty, and imposed a penalty, leading to the appellant filing the appeal.

During the proceedings, the appellant's counsel argued that the delay in filing the declaration was inadvertent and due to a clerk's mistake. He contended that all necessary documents and requirements were fulfilled, and production had started in 2009. Therefore, he requested to condone the delay and extend the benefit retrospectively to the appellant. On the other hand, the Department's representative relied on a previous Tribunal order and argued that the appellant could not be granted the benefit of the notification due to the failure to claim it before the specified last date.

After reviewing the submissions and the records, the Tribunal observed that the appellant had filed the declaration belatedly in an attempt to obtain the benefit of Notification 50/2003 retrospectively, which was impermissible. The notification required verification at the time of commencing commercial production, with specific details to be provided by the appellant before the deadline of 31-12-2009. As the appellant failed to meet these mandatory requirements within the stipulated period, retrospective notification and verification were not feasible.

Consequently, the Tribunal held that the benefit under Notification No. 50/2003 could not be granted to the appellant retrospectively, affirming the impugned order with the stated reasons. However, the appellant was deemed entitled to Cenvat credit for the period under consideration upon payment of duty, subject to meeting the necessary conditions and verification. Therefore, the Tribunal partially allowed the appeal, remanding the matter to the Original Authority to assess the Cenvat credit claim on its merits while upholding the rest of the Tribunal's order.

In conclusion, the appeal was partly allowed, with the decision communicated and pronounced in the open court.