2019 (7) TMI 1781 - AT - Central Excise

Area Based Exemption - benefit under N/N. 49/2003-CE dated 10.06.2003 denied to the appellant for want of the declaration about availing the said exemption to be filed with the jurisdictional Assistant Commissioner - precedent decisions on the issue not considered - HELD THAT - The admitted fact of the case is that the requisite declaration was given by the Appellant vide letter dated 18.08.2009, to not to the Deputy Commissioner, Dehradun, who is the Jurisdictional Commissioner but to the Superintendent of Central Excise, Kotdwar - It is also an admitted fact that all requisite documents as required in the said notification have also been forwarded by the Appellant to the department. However, instead of forwarding to the Jurisdictional Assistant Deputy Commissioner, same were forwarded to the Commissioner of Commercial Tax, Kotdwar, DGM, Dehradun and also to the Fire Station Officer. It is also no-where been disputed that the hand held computers as are manufactured by the Appellant are covered by the impugned exemption notification. The Appellant unit is also admittedly located in the Sigaddi Growth Centre (SIDCUL) near Kotdwar, District Pauri Garhwal, Uttar Pradesh, i.e. the area as notified in the impugned notification. It becomes clear that despite the same issue stands already decided by this Tribunal in favour of the appellant, department continued issuing notices for the subsequent periods in sheer violation of the findings arrived by this Tribunal in the previous appeals. This is observed as an act against the judicial protocol, hence, cannot be allowed to sustain. The department is rather warned to be careful about the decision of this Tribunal and of superior courts to be followed and applied in the similar facts and circumstances. Due consideration must be given to Judicial pronouncement unless until the genuine reasons distinguishing these pronouncements from the case in hand are duly recorded. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of exemption under notification No. 49/2003-CE
- Imposition of penalty based on interpretation of notification provisions

Analysis:
1. Denial of Exemption:
- The appellants were engaged in manufacturing hand-held computers and were availing exemptions under notification No. 49/2003-CE.
- The department alleged removal of excisable goods without payment of Central Excise duty, leading to a demand for duty, interest, and penalty.
- The appellant argued that they had complied with the exemption requirements by submitting necessary documents to the department.
- The Tribunal noted that the declaration for availing the exemption was filed with the Superintendent of Central Excise, Kotdwar, instead of the Deputy Commissioner, as per the notification.
- Despite the procedural error, the Tribunal held that substantial compliance was made by the appellant, and the benefit of the notification could not be denied.

2. Imposition of Penalty:
- The dispute arose from the interpretation of provisions in the notification regarding the filing of declarations.
- The appellant contended that no malafide intent was involved, and therefore, penalty imposition was unwarranted.
- The department argued that non-compliance with the notification's conditions justified confirming the demand.
- The Tribunal observed that the key issue was whether the exemption could be denied based on the failure to file the declaration with the jurisdictional Assistant Commissioner.
- Considering the facts and circumstances, the Tribunal held that the declaration was filed with the jurisdictional commissionerate, albeit with a procedural error, and thus, the benefit of the exemption could not be denied.

3. Judicial Precedents and Department's Actions:
- The Tribunal highlighted previous show-cause notices and appeals where the department's demands were confirmed but later decided in favor of the appellant by the Tribunal.
- Despite previous decisions in favor of the appellant, the department continued issuing notices, leading to a warning from the Tribunal regarding judicial protocol.
- The Tribunal emphasized the importance of following judicial pronouncements and warned the department to consider such decisions unless genuine reasons for differentiation are recorded.

In conclusion, the Tribunal set aside the order under challenge, allowing the appeal based on the substantial compliance by the appellant with the exemption requirements despite procedural errors. The judgment emphasizes the significance of adhering to judicial precedents and applying them in similar factual scenarios, warning against disregarding established decisions.