2018 (3) TMI 1231 - AT - Central Excise

Area Based Exemption - N/N. 50/2003-CE dated 10.06.2003 - whether or not the Appellants did give the required intimation as stipulated under Proviso (i) of Notification No. 50/2003-CE dated 10.06.2003? - denial also on the ground that the Appellants had failed to commence commercial production on or before 31.03.2010 - Held that - the intimation dated 25.03.2010 was acknowledged by the jurisdictional Officer on 29.03.2010. The said intimation clearly mentions the intention of the Appellants to start commercial production in the last week of March 2010 along with full details of address products to be manufactured raw-material to be used and possible date of commercial production - the said intimation has clearly satisfied the conditions mentioned in Proviso (i) of the said Notification. Commencement of production on or before 31.03.2010 - Held that - the findings are based on presumption and inference and not rebutting the evidences listed above categorically either for their accuracy or by way of counter evidence - Revenue did not at all conduct any further verification with the buyers of the goods and also regarding the capacity of the Appellants to manufacture such goods - the Officer did visit the premises on 10.04.2010 but no contradictory evidence was brought on record. The impugned order is neither factually nor legally sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Entitlement to area-based exemption under Notification No. 50/2003-CE dated 10.06.2003 based on commencement of commercial production before 31.03.2010.

Analysis:
The appeal was filed against the Order-in-Original denying the area-based exemption to the Appellants for not commencing commercial production before 31.03.2010. The Appellants claimed to have started production and provided various evidences supporting their claim. The dispute revolved around the availability of electricity connection and the Appellants' capacity to manufacture goods. The Revenue imposed a penalty equal to the denied exemption. The Appellants argued that they had started production before the deadline and submitted corroborative evidence, including clearances of goods to different parties, receipts, and hiring of a DG set. They also intimated the jurisdictional Officer about the commencement of production. The Revenue contended that the conditions of the Notification must be strictly interpreted, and the impugned order was correct on merit and limitation.

The Tribunal examined whether the Appellants had given the required intimation and commenced production before the deadline. The intimation dated 25.03.2010, acknowledged on 29.03.2010, satisfied the conditions of the Notification. Regarding the commencement of production, the Tribunal reviewed the documentary evidence provided by the Appellants, such as DG set hiring, payment, purchase of diesel, sale invoices, and receipt of goods by a party on 31.03.2010. The Tribunal noted that the Revenue's findings were based on presumption and inference without rebutting the Appellants' evidence. The Revenue failed to conduct further verification with buyers or regarding the Appellants' manufacturing capacity. The Tribunal found the impugned order factually and legally unsustainable, setting it aside and allowing the appeal.

Therefore, the Tribunal held that the Appellants were entitled to the area-based exemption under the Notification as they had satisfied the conditions by intimating the commencement of production and providing sufficient evidence of having started production before 31.03.2010.