2016 (11) TMI 696 - AT - Central Excise

Area based exemption - N/N. 50/2003-CE dated 10.06.2003 - non-filing of declarations as mentioned in Condition No. (ii) of proviso in the said notification - Held that - The details as required to be filed in the option were all available in the letter dated 15.03.2010 seen in the appeal records. The said letter was in connection with registration of the Unit No. III under Rule 9 of Central Excise Rules, 2002. The registration as sought for has been given by the department on 19.03.2010. However, we note that the appellant indicated in the said Notification No. 76/2008-CE dated 24.03.2008 with reference to already existing unit (Unit -II) apparently no reference to area based exemption No. 50/2003 was made when new registration was sought for Unit No. III. However, the monthly ER-I return which is a statutory return giving various details of excisable goods manufactured and cleared and the exemption availed was filed for Unit No. III for the month of March, 2010 on 10.04.2010. The said return clearly indicated Notification No. 49/2003 and 50/2003 alongwith details like description of goods, quantity manufactured etc. The department has been intimated about the existence of the unit, nature of products manufactured and the exemption claimed under N/N. 50/2003-CE. We find that the same can be considered as adequate compliance of the condition of the notification. We again note that there is no other material ground on which the exemption is sought to be denied. In view of these factual positions, we find no justification in denial of exemption and accordingly set-aside the impugned order - appeal allowed.

Summary

Issues:
Exemption availed under Notification No. 50/2003-CE for Unit No.III based on declaration filing requirement.

Analysis:
The case involved a dispute regarding the exemption availed by the appellants in Unit No.III under Notification No. 50/2003-CE. The central issue was the denial of exemption due to the failure to file a specific declaration as required by the notification. The original authority issued a show cause notice to recover a significant amount from the appellant for not fulfilling this condition. The appellant argued that they met all other conditions for the exemption and that the failure to file the declaration should not justify denying the exemption. They highlighted their compliance with location requirements, manufacturing goods within the notification's scope, and providing necessary information to the authorities. The appellant's counsel emphasized the procedural steps taken, including filing a letter in 2010 to inform about the new manufacturing unit (Unit No.III) and submitting all required documents for Central Excise registration.

The appellant contended that they adequately informed the department about their manufacturing activities and the exemption claimed under Notification No. 50/2003-CE. They argued that the monthly returns filed for Unit No.III clearly indicated the exemption claimed, fulfilling the notification's requirement. The appellant's submission emphasized that the department had all necessary information regarding the new unit and the goods manufactured, which should be considered as sufficient compliance with the notification's conditions. The appellant's compliance with other statutory requirements and the absence of any other grounds for denying the exemption were crucial points in their argument.

Upon reviewing the case, the tribunal noted that the department did not dispute key facts such as the unit's location, goods manufactured, and production commencement date. The tribunal observed that the original authority justified denial based on the declaration requirement added later to the notification. However, upon examining the details provided by the appellant, especially the letter submitted for Central Excise registration and the monthly returns indicating the exemption claimed, the tribunal found that the department had been adequately informed about the manufacturing activities and exemption availed. The tribunal concluded that the appellant's actions constituted substantial compliance with the notification's conditions, and as there were no other valid grounds for denial, the exemption denial was unjustified. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the appellant.