2018 (7) TMI 2093 - AT - Central Excise

Area Based Exemption under N/N. 32/99-C.E. dated 8-7-1999 - new unit was came into existence after closure of the earlier unit on the same premises - manufacture of moulded plastic chair from the premises owned by M/s. Siotia Steels Limited Guwahati w.e.f. August 2003 - period of dispute from November 2003 to December 2006 - HELD THAT - The respondent-assessee unit was set up in the vacant land available in the premises of M/s. Siotia Steels Limited Guwahati vide a Lease Agreement dated 29-4-2003 between M/s. Siotia Steels Limited Guwahati and the respondent herein M/s. I-Tech Global Ltd. obtained Central Excise registration and the Unit has been set up within the premises which is otherwise registered in the name of M/s. Siotia Steels Limited Guwahati which existed prior to 24-12-1997 - also M/s. Siotia Steels Limited Guwahati neither applied for any amendment to their existing registration certificate before or after execution of the Lease Agreement dated 29-4-2003 nor surrendered their registration certificate. It is the case of the respondent that there was no pecuniary relationship between them and M/s. Siotia Steels Limited Guwahati - The fact that M/s. Siotia Steels Limited Guwahati did not surrender/amend their registration certificate cannot be a ground to deny the statutory benefits to the respondent under the said notification. Also When a new unit was came into existence after closure of the earlier unit on the same premises benefit of Notification No. 32/99-C.E. cannot be denied. Also the respondent-assessee cannot be left to suffer for the fault of either Department or M/s. Siotia Steels Limited Guwahati - It is the legal position that exemption under a notification cannot be denied to the assessee merely on the basis of certain procedural irregularities. Impugned order upheld - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Interpretation of Notification No. 32/99-C.E.
2. Validity of Central Excise registration.
3. Denial of statutory benefits.
4. Procedural irregularities affecting exemption.

Interpretation of Notification No. 32/99-C.E.:
The case involved the interpretation of Notification No. 32/99-C.E. regarding the eligibility of the respondent-assessee, engaged in manufacturing activities, for exemption benefits. The respondent had set up a manufacturing unit within the premises of another entity, M/s. Siotia Steels Limited, Guwahati, under a Lease Agreement. The Tribunal noted that the respondent's unit was physically verified and found eligible for exemption under the said notification, despite procedural irregularities.

Validity of Central Excise registration:
The Tribunal examined the validity of the Central Excise registration of the respondent's unit, which was set up in the premises of M/s. Siotia Steels Limited, Guwahati. It was observed that the respondent had obtained Central Excise registration and established the unit within the premises of M/s. Siotia Steels Limited. The lack of amendment or surrender of registration by M/s. Siotia Steels Limited did not preclude the respondent from claiming statutory benefits under the notification.

Denial of statutory benefits:
The issue of denial of statutory benefits to the respondent arose due to the failure of M/s. Siotia Steels Limited to surrender or amend their registration certificate. The Tribunal held that the absence of a pecuniary relationship between the respondent and M/s. Siotia Steels Limited, along with the establishment of a new unit after the closure of the earlier one on the same premises, warranted the granting of benefits under Notification No. 32/99-C.E.

Procedural irregularities affecting exemption:
The Tribunal emphasized that the respondent-assessee should not suffer due to procedural irregularities on the part of the Department or M/s. Siotia Steels Limited. It was clarified that denial of exemption under a notification cannot be justified solely based on procedural lapses. Consequently, the Tribunal upheld the lower authorities' orders, rejecting the appeal filed by the Department and affirming the respondent's eligibility for exemption benefits under Notification No. 32/99-C.E.