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2017 (3) TMI 640 - AT - Central ExciseArea based exemption - Benefit of N/N. 50/2003-CE dated 10.06.2003 - denial on the ground that no capital goods were installed in the appellant s unit except one compressor, stating that manufacturing activities by the appellant is not possible - whether the appellant has started its commercial production prior to 31.03.2010, in order to get the benefit in the Notification No. 50/2003 dated 10.06.2003? - Held that - the department has not properly conducted the inquiry in order to arrive at the conclusion that the appellant is not entitled for the exemption provided in Notification dated 16.03.2010. The evidences submitted by the appellant show the commencement of commercial production and VAT paid clearances of excisable goods by the unit prior to 31.03.2010 - appeal allowed - decided in favor of appellant.
Issues:
- Denial of benefit under Notification dated 10.06.2003 - Commencement of commercial production before 31.03.2010 - Allegations of improper inquiry by the department Denial of Benefit under Notification dated 10.06.2003: The case involved the appellant, engaged in manufacturing helmets falling under Chapter 65 of the Central Excise Tariff Act, 1985, who applied for exemption under Notification No. 50/2003-CE dated 10.06.2003. The department alleged that no capital goods were installed except one compressor, leading to the denial of the benefit. Show Cause proceedings were initiated, resulting in confirmed Central Excise duty recovery, interest, and penalties. The Ld. Commissioner (Appeals) upheld the demand, prompting the appeal before the Tribunal. Commencement of Commercial Production before 31.03.2010: The appellant contended that commercial production started on 26.03.2010, supported by evidence such as invoices, consignment notes, and VAT returns filed before the authorities. The department's doubt regarding the movement of capital goods in September 2010 was clarified, stating the movement occurred in March 2010. The Tribunal found that the production indeed began on 26.03.2010, making the appellant eligible for the exemption under the Notification dated 10.06.2003. It criticized the department for not following proper procedures during verification and concluded that the department's inquiry was flawed. Allegations of Improper Inquiry by the Department: The Tribunal observed that the department failed to conduct a proper inquiry to conclude that the appellant was not entitled to the exemption. Evidence submitted by the appellant, including the commencement of commercial production and VAT-paid clearances before 31.03.2010, supported their claim. The Tribunal found the department's inquiry lacking and the impugned order to be passed in a presumptive and summary manner. Consequently, the appeals were allowed in favor of the appellant, highlighting the inadequacies in the department's investigation and the appellant's compliance with the conditions for exemption.
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