2016 (10) TMI 337 - AT - Central Excise

Demand of duty with interest and penalty - denial of benefit of exemption under Notification No. 50/2003-CE dated 10.06.2003 - exemption claimed on the ground that substantial expansion in the installed capacity by more than 25% - Held that - Tribunal held that the appellants are entitled for benefit of exemption Notification No. 50/2003-CE ibid, the impugned orders demanding duty, interest and penalty deserves no merits - no demand sustainable against the appellants - appeal allowed - decided in favor of appellants.

Summary

Issues:
1. Entitlement to duty concession under Notification No. 50/2003-CE for substantial capacity expansion.
2. Denial of exemption leading to demand of duty, interest, and penalty.
3. Appeal against the orders confirming duty demand.

Analysis:
1. The appellants, engaged in manufacturing tractor parts, claimed duty concession under Notification No. 50/2003-CE for a substantial capacity expansion. The Department sought to deny the exemption, leading to proceedings and demand of duty for the period January 2007 to February 2008. Both authorities below confirmed the duty demand, interest, and penalty. The appellants appealed against these orders.

2. The appellants initially faced denial of exemption, which was challenged up to the Hon'ble High Court of Himachal Pradesh. The High Court remanded the matter back to the Tribunal for reconsideration. Subsequently, the Tribunal held that the appellants were entitled to the exemption under Notification No. 50/2003-CE. Therefore, the appellants argued that the impugned orders should be set aside based on this determination.

3. After hearing both parties, the Tribunal considered that the demand in the impugned orders was based on the denial of the exemption under Notification No. 50/2003-CE. Since the Tribunal had already established the appellants' entitlement to this exemption, the impugned orders were found to lack merit. Consequently, the Tribunal set aside the orders, allowing the appeals with any consequential relief deemed necessary.