2016 (7) TMI 1030 - AT - Central Excise

Claim of exemption - Area based exemption - the original authority rejected ₹ 72,963/- on the ground that the product Acid Oil was not manufactured before 31.12.2005, hence, not eligible to the benefit of said exemption Notification. - Notification No.39/2001-CE dated 31.07.2001 - Held that - a categorical submission has been advanced by the appellant before the Ld. Commissioner (Appeals), and evidences of installation of plant and machinery prior to 31.12.2005, capable to manufacture Acid Oil were produced and also before us a categorical submission has been advanced by the Ld. Advocate for the appellant that the Acid Oil had been manufactured, without addition of any plant and machinery to the existing line of manufacture of goods, after the cut off date 31.12.2005. The observation of the Ld. Commissioner(Appeals), on the other hand rests on conjectures and surmises. In these circumstances, we are of the opinion that the appellant had since complied with all the conditions of the notification in respect of the product Acid Oil, hence, eligible to the benefit of Notification No. 39/2001-CE dated 31.07.2001 - Decided in favor of assessee.

Summary

Issues:
Appeal against order-in-appeal rejecting refund claim based on area-based exemption Notification No.39/2001-CE for Acid Oil manufactured after 31.12.2005.

Analysis:
The appellant, engaged in manufacturing various products falling under Chapter 15 of CETA, filed a refund claim for all products, including Acid Oil, under Notification No.39/2001-CE. The claim was partly rejected due to Acid Oil not being manufactured before 31.12.2005. The appellant contended that despite Acid Oil being produced after the cut-off date, they should still be eligible for the exemption. They provided evidence of plant installation before 31.12.2005 and argued that no new machinery was added post the cut-off date. The Revenue supported the Commissioner (Appeals)'s findings.

The Tribunal examined whether the appellant qualified for the benefit of the notification for Acid Oil made post 31.12.2005 using pre-existing machinery. The Commissioner (Appeals) had doubted if Acid Oil was manufactured from the same machinery installed before the cut-off date. The Tribunal referred to past decisions and a CBEC Circular, emphasizing that if a new product is made post the cut-off date using existing machinery, the benefit should not be denied. The Tribunal noted the appellant's submission of evidence of pre-cut-off date machinery installation capable of producing Acid Oil without additional machinery post 31.12.2005. They found the Commissioner (Appeals)'s reasoning speculative and held that the appellant met all notification conditions for Acid Oil, thus entitled to the exemption.

The Tribunal set aside the impugned order, allowing the appeal with any consequential relief as per law.