2018 (7) TMI 1703 - SC - Central Excise

Area Based Exemption - taking over a non-functional unit - it was alleged that the respondent had taken over M/s. Stanley Controls only for the purpose of getting relief/exemption under the notification in question - Held that - The learned Tribunal has not dealt with the said aspect of the matter despite the categorical findings recorded by the adjudicating authorities i.e. primary and appellate authority - the matter should be remanded to the learned Tribunal for a reconsideration of the said question - appeal allowed by way of remand.

Summary

Issues involved:
Entitlement under area-based exemption scheme; Non-functional unit takeover for tax relief/exemption; Failure to address critical aspect by Tribunal; Remand for reconsideration.

Entitlement under area-based exemption scheme:
The judgment revolves around determining the entitlement of the respondent under the area-based exemption scheme. The primary and appellate authorities had ruled against the respondent, alleging that the takeover of a non-functional unit, M/s. Stanley Controls, was solely for the purpose of obtaining tax relief/exemption. The Tribunal was tasked with examining this contention, which it failed to address. Consequently, the Supreme Court decided to remand the matter to the Tribunal for a fresh consideration of this crucial issue.

Non-functional unit takeover for tax relief/exemption:
A significant aspect of the case was the allegation that the respondent had acquired the non-functional unit, M/s. Stanley Controls, merely to benefit from tax relief or exemption under a specific notification. Both the primary and appellate authorities had based their decisions on this premise. The Supreme Court highlighted the importance of the Tribunal's assessment of this claim and emphasized the need for a thorough reconsideration of whether the takeover was indeed for the purpose of obtaining tax benefits.

Failure to address critical aspect by Tribunal:
The Supreme Court noted a critical failure on the part of the Tribunal in not addressing the specific aspect concerning the takeover of the non-functional unit and its implications for tax relief/exemption. Despite clear findings by the lower authorities, the Tribunal had overlooked this crucial point. As a result, the Court decided to set aside the Tribunal's order and remand the matter for a fresh examination, underscoring the importance of a comprehensive analysis of all relevant factors in such cases.

Remand for reconsideration:
In concluding the judgment, the Supreme Court set aside the Tribunal's order and remanded the matter for de novo consideration specifically regarding the contentious issue of the respondent's takeover of the non-functional unit for tax relief/exemption purposes. By allowing the appeal and ordering a fresh assessment, the Court aimed to ensure a more thorough and accurate examination of the facts and circumstances surrounding the case, particularly the motive behind the acquisition of M/s. Stanley Controls.