2016 (9) TMI 420 - AT - Central Excise

Area Based Exemption - benefit under Notification No. 50/03-CE, dated 10.06.2003 - manufacture of MS Ingots at Kotdwar (Uttarakhand) - assessee made expansion for increase of production by 25% to avail benefit - entire old plant and machineries were replaced by new one - Held that - the matter has already been considered and decided in favour of assessee by the Tribunal in the case pf Charu Steels Ltd. Vs. CCE, Meerut-I 2010 (2) TMI 446 - CESTAT NEW DELHI for the subsequent assessment year wherein it was held that if the plants and machineries are in replacement of the old plant and machinery, but the object of increasing 25% capacity is achieved, then in terms of the said circular itself, the industry achieving the same would come within 4 corners of the notification dated 10/06/2003. The same was upheld by the High Court of Nainital in 2011 (5) TMI 137 - UTTARAKHAND HIGH COURT and no further appeal has been filed against such order appearing the High Court Order as legal and proper. Therefore, no reasons found to interfere with the impugned order passed by the First Appellate Authority. - Decided against the Revenue

Summary

Issues:
Benefit of Area Based Exemption under Notification dated 10.06.2003 in Uttarakhand.

Analysis:
The appeal was filed by the department against the order of the Commissioner (Appeals) regarding the benefit of Area Based Exemption under a specific notification in Uttarakhand. The core issue revolved around whether the expansion made by the assessee for increased production qualified for the exemption. The assessee claimed that the entire old plant and machinery were replaced by new ones to achieve a 25% increase in production. However, the department contended that the benefit could not be extended as the expansion was not considered as the addition of new plant and machinery.

The Tribunal found that a similar issue had been previously considered and decided in favor of the assessee for a subsequent assessment year. The High Court had upheld the Tribunal's decision, stating that if the new plants and machinery were in replacement of the old ones and the objective of increasing capacity by 25% was achieved, the assessee would be eligible for the benefit under the notification. The Tribunal noted that the matter had attained finality as no further appeal had been filed after obtaining information from the Department of Revenue, Ministry of Finance through RTI.

Consequently, the Tribunal concluded that there was no valid reason to interfere with the order passed by the First Appellate Authority. The appeal filed by the department was deemed to lack merit, and thus, it was dismissed.