2019 (5) TMI 455 - AT - Central Excise

Area Based Exemption - N/N. 33/99 dated-8/7/1999 - increase in installed capacity by more than 25% (since 24/12/1997) by substantial expansion of their factory - rejection only on the ground that the appellant has failed to submit the necessary documents supporting the claim of expansion - HELD THAT - The order passed by the Original as well as the First Appellate Authority indicates that both the authorities have proceeded to reject the claim of expansion only on the ground that the appellant has failed to submit the necessary documents supporting the claim of expansion. On the basis of the documents submitted, it can be said that the claim for the benefit of Notification is required to be evaluated de novo after considering all these documents. The issue remanded to original authority for a de novo decision - appeal allowed by way of remand.

Summary

Issues:
Claim for Area Based Exemption under Notification No. 33/99 - Rejection of refund claim based on lack of documentary evidence - Discrepancy between Chartered Engineer's certificate and approved layout plan - Need for reevaluation of the claim.

Analysis:
The appellant, having a tea factory in Assam, claimed a refund under Notification No. 33/99 for increasing installed capacity by over 25% through substantial expansion. The dispute arose when the Department proposed to reject the claim, leading to subsequent rejection by the Assistant Commissioner and the Commissioner (Appeals). The rejection was based on the inability to verify the expansion due to lack of documentary evidence, particularly an approved ground plan. The Jurisdictional Superintendent's report highlighted this issue, questioning the verifiability of the expansion claimed by the appellant.

During the appeal process, both sides submitted various documents, including the show cause notice, reply, orders, and ground plans. The appellant relied on a Chartered Engineer's certificate indicating a 36.2% increase in installed capacity, emphasizing the growth in fermenting capacity. On the other hand, the Department argued that the layout plan showed no significant increase in saddles, a crucial factor for determining expansion. This discrepancy raised doubts about the actual expansion compared to the certified increase in capacity.

The Tribunal, after hearing both parties and examining the documents, concluded that a reevaluation of the claim was necessary. The rejection of the claim solely based on the lack of supporting documents was deemed insufficient. The discrepancy between the Chartered Engineer's certification and the approved layout plan required a fresh assessment to determine the eligibility for the Area Based Exemption under the notification. Consequently, the Tribunal set aside the impugned order and remanded the issue to the original authority for a de novo decision within two months, emphasizing the need for a comprehensive review considering all submitted documents.