2019 (10) TMI 1098 - AT - Central Excise

Demand of duty refunded in cash - area based exemption under N/N. 56/2002-CE dated 14.11.2002 - adjudicating authority has confirmed demand on the grounds that the farmers are non existence ensuring non supply of raw material by commission agents to J K based units and absence of evidence of power by the appellant - HELD THAT - Identical issue decided in the case of M/S NANDA MINT PINE CHEMICALS LTD. VERSUS CC, CHANDIGARH-II 2018 (10) TMI 877 - CESTAT CHANDIGARH where it was held that As there is no corroborative evidence to show that the appellant were not manufacturing the goods, therefore, the allegation alleged in the show cause notice is not sustainable. As the issue has already been settled that Revenue has failed to establish that there was no manufacturing activity and we also take a note of the fact that Jammu Commissionerate has frequently visited the factory premises and found manufacturing the goods going in their own, in that circumstances, the allegation made in the impugned order are not sustainable against the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
Allegations of non-existence of farmers supplying raw material, sustainability of demand against appellant based on investigation, admissibility of cenvat credit, validity of show cause notice, benefit of exemption Notification No. 56/2002-CE.

Analysis:

The judgment by the Appellate Tribunal CESTAT Chandigarh involved several crucial issues. The case revolved around allegations of non-existence of farmers supplying raw material to Jammu & Kashmir based units, leading to the denial of cenvat credit and demands for duty refund. The investigation conducted by the Commissioner of Central Excise, Merrut, formed the basis of these allegations. The appellant challenged the impugned order, arguing that a similar case involving M/s Nanda Mint & Pine Chemicals Ltd. had been decided in their favor by the Tribunal, indicating that the demand was not sustainable against them.

The Tribunal analyzed the evidence presented, including reports from various departments such as the Pollution Control Department and the District Industries Department, which confirmed the functioning of the appellant's factory. The Tribunal also considered the findings of previous cases, such as M/s Arora Aromatic & Others, where the Tribunal had set aside orders due to lack of concrete evidence against the appellants. The Tribunal emphasized that the Revenue failed to establish the absence of manufacturing activity by the appellant, especially since the Jammu Commissionerate had verified the manufacturing process at the factory premises.

Ultimately, the Tribunal concluded that the allegations made in the impugned order were not sustainable against the appellant. Citing the lack of evidence and the precedents set by previous cases, the Tribunal set aside the impugned order and allowed the appeal, granting the appellant the benefit of the exemption under Notification No. 56/2002-CE. The judgment highlighted the importance of concrete evidence and proper investigation in establishing allegations against appellants in such cases.