2018 (10) TMI 957 - AT - Central Excise

Area Based exemption - N/N. 49/50-CE dated 10.06.2003 - scope of SCN - In remand proceedings, the directions of this Tribunal were followed and the adjudicating authority held that the appellant is entitled for exemption Notification No. 49/50-CE dated 10.06.2003. But on appeal filed by the Revenue before the Ld. Commissioner (A), the exemption was denied. Held that - In compliance to the directions given by this Tribunal, both the witnesses were examined and it was revealed that the commercial production was started before 31.03.2010. The objection taken by the Ld. AR that some of the machinery has been imported was cleared by the appellant after 31.03.2010. The same was not the subject matter of the show cause notice to deny exemption to the appellant. In that circumstances, the evidence gathered after issuance of the show cause notice cannot be subject matter of the case in hand - the evidence gathered after issuance of the show cause notice cannot be taken on record and the same are beyond the allegation made in the show cause notice. When the appellant filed the declaration with the department on 21.03.2010 and till 31.03.2010, the departmental officers have taken not any pain to visit the appellant s factory, therefore, the benefit of doubt goes in favour of the appellant. The order of the adjudicating authority is restored - appeal disposed off.

Summary

Issues:
Exemption denial under Notification No. 49/50-CE dated 10.06.2003.

Analysis:
The appellant, a manufacturer of aluminum sheets and foils, sought exemption under Notification No. 50/03-CE dated 10/6/03, claiming to be a new unit set up after 07/1/03. However, investigations revealed that commercial production had not commenced by 31/3/10 as claimed. The Deputy Commissioner, after a show cause notice, denied the exemption. The Commissioner (Appeals) upheld this decision, leading to the current appeal. The Tribunal remanded the matter back to the adjudication authority, which then allowed the exemption. The Revenue appealed, resulting in the current hearing.

The appellant argued that the Tribunal's directions for cross-examination were followed, confirming the start of commercial production on 30/31.03.2010. However, the Commissioner (A) questioned the certification date without specifying the visit date to the factory. The appellant contended that the impugned order was not sustainable due to this discrepancy.

The respondent argued that the visit date to the factory was not specified, casting doubt on the start date of commercial production. They claimed the appellant produced substandard goods, procured raw materials post-31.03.2010, and imported machinery in April, contradicting the production date.

The Tribunal found that both witnesses confirmed commercial production before 31.03.2010. The objection regarding machinery import post-31.03.2010 was deemed irrelevant as it was not part of the show cause notice. Evidence gathered post-show cause notice was ruled inadmissible. The witnesses' statements during cross-examination were deemed admissible. The Tribunal noted the lack of visits by departmental officers to the factory between 21.03.2010 and 31.03.2010, giving the benefit of doubt to the appellant. Consequently, the impugned order was set aside, and the adjudicating authority's decision was restored, allowing the exemption under Notification No. 49/50-CE dated 10.06.2003.