2019 (5) TMI 456 - AT - Central Excise

Area Based Exemption - N/N. 33/99 dated-8/7/1999 - the installed capacity for the manufacture of tea in the factory was increased by more than 25% by way of substantial expansion since 24/12/1997 - HELD THAT - There are discrepancies in the total number of machines installed in various sections prior to and subsequent to the expansion of factory. But the Chartered Engineer Shri R. Das, who has inspected the factory after the expansion, has certified that as a result of the installation of additional equipment, the installed capacity has been increased by more than the limit of 25% specified in the notification. We note that such conclusion of the Chartered Engineer has not been disputed either by the original or first Appellate Authority. The opinion expressed by the Chartered Engineer may be accepted to arrive at the conclusion that the appellant has duly expanded the installed capacity over 25% and satisfies the substantial expansion as per Notification. The appellant has satisfied the requirement of substantial expansion by more than 25% - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Benefit of Area Based Exemption under Notification No. 33/99.
2. Rejection of refund claim due to time bar.
3. Discrepancies in the total number of machines installed pre and post expansion.
4. Interpretation of the Notification and the relevant legal provisions.
5. Compliance with substantial expansion requirements.
6. Entitlement to refund claim despite delay.

Analysis:
1. The appellant, having a Tea factory in Assam, sought the benefit of Area Based Exemption under Notification No. 33/99. The claim was based on a substantial expansion of the factory's installed capacity for tea production by more than 25% since 24/12/1997.

2. The rejection of the refund claim was primarily due to being time-barred, filed several years after the substantial expansion. However, the appellant argued that the claim under Area Based Exemption should not be subject to time limits specified in Section 11B of the Central Excise Act, citing a decision of the Hon'ble Guwahati High Court.

3. Discrepancies in the number of machines installed pre and post expansion were highlighted, particularly in the Withering Section and Drying Section. The original authority raised concerns about the accuracy of the expansion date and the number of machines, leading to the rejection of the refund claim.

4. The Tribunal analyzed the Notification, emphasizing the requirement of substantial expansion and the submission of duty paid statements. The Tribunal considered the certification by a Chartered Engineer confirming the capacity increase by over 25% post-expansion, which was not disputed by the authorities.

5. Despite discrepancies in machine numbers, the Tribunal accepted the Chartered Engineer's conclusion on the capacity increase. Following the Hon'ble Guwahati High Court's decision, the Tribunal held that the appellant satisfied the substantial expansion criteria and was entitled to the refund claimed.

6. The Tribunal concluded that the refund claim, though delayed, should be entertained based on the legal interpretation of the Notification and the substantial compliance with expansion requirements. The judgment set aside the previous orders and allowed the appeal, emphasizing that refund claims under Notification No. 33/99 are not restricted by the time limits under Section 11B.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues and the Tribunal's decision regarding the appellant's refund claim under the Area Based Exemption notification.