2018 (3) TMI 449 - AT - Central Excise

Area based exemption - change of assessee - Benefit of N/N. 50/2003 CE dated 10/06/2003 - Revenue had taken the view that the entire premises was occupied by M/s Mahabir Steel Tubes was leased to M/s Wonder Fibromat Pvt. Ltd and the original unit was not functioning on the date when the same was taken over by the present appellant - Held that - In the present case, both circumstances co-exist. The present appellant has purchased the unit from M/s Mahabir Steel Tubes and has also transferred the unit to a new site. The reason cited by the revenue for denying the benefit is that the unit was not functional at the original place before it was shifted. From the record available we notice that certain portion of the original factory continued to exist in the name of M/s Mahabir Steel Tubes on the date on which the unit was taken over and subsequently shifted. The benefit of exemption will be available to the new unit provided they are able to satisfy the revenue authorities that it is the same machinery which has been shifted to the new premises. The relevant Chartered Engineer s Certificate furnished by the appellant does not appear to have been considered and discussed by both the authorities below. The matter remanded to the Original Authority for considering the observations as above and to pass de novo orders on the subject - appeal allowed by way of remand.

Summary

Issues:
- Interpretation of Notification No. 50/2003 CE dated 10/06/2003 regarding benefits.
- Transfer of benefits under the notification to a new unit after the original unit becomes defunct.
- Consideration of ownership change and unit transfer to a new site.
- Verification of machinery relocation and eligibility for benefit continuation.

Analysis:

Interpretation of Notification No. 50/2003 CE:
The case involved the interpretation of Notification No. 50/2003 CE dated 10/06/2003, specifically regarding the benefits available to units covered under the notification. The Circular dated 17/02/2012 by CBEC clarified the circumstances under which the benefit would continue to be available. It allowed for the shifting of a unit availing the benefit to another area covered by the notification without denial of benefits.

Transfer of Benefits to a New Unit:
The appellant, M/s R J S Infotech Pvt. Ltd., took over a unit previously availing benefits under the notification from M/s Mahabir Steel Tubes. The Revenue authorities denied the benefit, arguing that the original unit was defunct before the transfer. However, the appellant claimed that they relocated the machinery to a new premises within the notified area and should be eligible for the benefit continuation.

Ownership Change and Unit Transfer:
The Revenue contended that as the original unit was not operational and had become defunct, the benefits could not be extended to the appellant. The appellant argued that the machinery from the original unit was shifted to the new premises, supported by a Chartered Engineer's certificate as per Trade Notice No. 7/2012 dated 2/5/2012. The Board's circular clarified that benefits should not be denied in cases of unit transfer and ownership change.

Verification of Machinery Relocation:
The Tribunal found that the machinery relocation and continuity of the unit needed verification. The Chartered Engineer's certificate submitted by the appellant was not adequately considered by the Revenue authorities. The Tribunal emphasized the importance of verifying the relocation of the same machinery to the new premises to determine the eligibility for benefit continuation. As a result, the impugned order was set aside, and the matter was remanded to the Original Authority for further consideration based on the evidence presented.

In conclusion, the Tribunal allowed the appeal by way of remand, directing a reevaluation of the case considering the machinery relocation and adherence to the Circular's guidelines for benefit continuation under Notification No. 50/2003 CE.