2017 (10) TMI 73 - AT - Central Excise

Area Based exemption - N/N. 50/2003 CE dated 10/06/2003 - products cleared from their factory established in the Eureka Forbes Industrial Area - Held that - it is not the intention of Revenue that exemption be allowed with respect to only particular plot numbers. The notification starts with the words Exemption to goods other than specified goods cleared from units located in the Industrial Growth Centre or Industrial Infrastructure Developer Centre, etc. of Uttranchal and Himachal Pradesh - there is no intention of the Government in the said notification to give exemption with respect to particular plot numbers - appeal allowed - decided in favor of appellant.

Issues:
1. Denial of exemption under Notification No. 50/2003 CE to the appellant.
2. Interpretation of the exemption notification regarding the specific plot or Khasra numbers mentioned.
3. Adjudication of Show Cause Notices by the Commissioner.
4. Legal acceptability of the appellant's argument regarding the specified Khasra numbers.
5. Appeal before the Tribunal challenging the denial of area-based exemption.
6. Examination of the intention of the Government in granting exemption based on specific plot numbers.

Analysis:

1. The appellant, engaged in manufacturing "Vacuum Cleaners" in an Industrial Area listed in Notification No. 50/2003 CE, claimed exemption under the said notification. The dispute arose when the Revenue contended that certain plot numbers where the manufacturing activity took place were not covered under the notification, leading to the denial of exemption.

2. The Show Cause Notices issued highlighted discrepancies in the location of the core production area and access gates, not falling within the specified Khasra numbers mentioned in the exemption notification. The Revenue's position was based on the findings of the Department officers and certification by the Patwari, indicating that parts of the land used by the appellant were not covered under the exemption.

3. The Commissioner, in the impugned order, denied the area-based exemption, emphasizing the need to interpret the notification in line with established legal principles. The Commissioner held that units falling outside the specified Khasra numbers mentioned in Annexure-II of the notification were not eligible for exemption, irrespective of the specific activities carried out in those areas.

4. The appellant contested the denial by arguing that the exemption should apply to the entire unit located in the Industrial Area, regardless of specific plot numbers. They emphasized that the notification did not limit exemption based on activities conducted in particular areas and that the core manufacturing activities were within the specified Khasra numbers.

5. The Tribunal, upon hearing the arguments, analyzed the notification's language and intent. It clarified that the exemption was not tied to specific plot numbers but aimed at units located in designated Industrial Areas. The Tribunal noted that the reference to plot or Khasra numbers was for identification purposes only, and the majority of the production activities were within the specified plots, entitling the appellant to the area-based exemption.

6. Ultimately, the Tribunal allowed the appeal, overturning the Commissioner's order and granting consequential benefits to the appellant. The Tribunal's decision was based on the understanding that the exemption was not limited to particular plot numbers but applied to units within designated Industrial Areas, as specified in the notification.

This detailed analysis of the judgment showcases the interpretation of the exemption notification, the arguments presented by the parties, and the Tribunal's decision based on the legal principles and the intent of the notification.

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