2018 (1) TMI 524 - AT - Central Excise

Area based exemption - N/N. 50/2003 dated 10.6.03 - appellant has expanded the factory 25% and claimed area based exemption on expansion which was denied by the lower authorities for want of certificate issued by the Chartered Accountant and other information - Held that - identical issue in assessee s own case for the earlier period has came up before the Tribunal as Kotdwar Steels Ltd. vs. CCE Meerut I 2016 (10) TMI 385 - CESTAT NEW DELHI where it was held that The proceedings by the department and the impugned orders heavily relied on certain suspicion and doubts raised against the claims by the appellant without due counter verification to categorically establish the correct expanded capacity by the Revenue - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeal dismissed on the ground of limitation - Delay in filing appeal - Area based exemption claim - Requirement of certificate by Chartered Accountant - Expansion of factory - Denial of exemption - Identical issue in earlier case - Verification of documents and certificates - Discrepancies in certificates - Lack of technical verification - Presumptions by original authority - Adverse presumptions against appellant - Verification of facts during relevant period - Legal conclusion based on presumptions - Appeal allowed.

Analysis:
The appeal in this case was initially dismissed due to a delay in filing, but the appellant challenged this decision before the Honorable High Court, which condoned the delay and admitted the appeal. Consequently, the appeal was restored to its original number for consideration on its merits. The appellant had a factory availing area-based exemption under a specific notification. The issue arose when the appellant expanded the factory by 25% and claimed the same exemption on the expansion, which was denied by lower authorities for lack of a certificate from a Chartered Accountant and other required information.

Upon hearing both parties and examining the records, it was noted that a similar issue had been addressed in the appellant's own case previously. In that earlier case, doubts and suspicions were raised by the department regarding documents and certificates submitted by the appellant. These doubts were related to items used in the expansion not crossing the Trade Tax Check Post, discrepancies in certificates issued by the Chartered Engineer and General Manager, and presumptions made by the original authority without technical verification.

The Tribunal observed that the doubts raised by the department could have been easily cross-verified, and the lack of such verification weakened the grounds for denial of exemption. Additionally, discrepancies in certificates were addressed, and the Tribunal found that the expansion in capacity was certified by a different Chartered Engineer and the General Manager of the District Industries Centre. The Tribunal emphasized that presumptions made by the original authority without technical verification could not form the basis of a legal conclusion.

Both parties agreed that the issue was covered by the Tribunal's earlier decision, leading to the impugned order being set aside. Ultimately, the Tribunal allowed the appeal, highlighting the importance of verifying facts during the relevant period and not relying on presumptions made after a significant time lapse.

In conclusion, the Tribunal's decision focused on the necessity of proper verification, the significance of certificates and documents, and the importance of basing legal conclusions on verified facts rather than presumptions. The appeal was allowed in favor of the appellant.