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2019 (12) TMI 788 - AT - Central ExciseMaintainability of proceedings - Area Based Exemption - Benefit of N/N. 32/99 and N/N. 8/04-CE dated 21.01.2004 - branded chewing tobacco in the brand name of Tulsi prior to 22.08.2001 - extension of existing unit - dispute in the instant case is related to the Shed No.17 located in the same Bamunimaidan Industrial Estate and Appellant s claim that this shed is an extension of its existing unit located at Shed No.6 7 in the same industrial Estate. HELD THAT - CBEC vide Circular No.960/03/2012-CX-3 dated 17.02.2012 has clarified that new plot if added should not affect the benefit. Further vide Circular No.939/29/2010-CX dated 22.12.2010 clarified that addition of new brands would also not mean denying the benefit. Even, if the Circular is modified subsequently against the interest of the assessee, the modification applies only prospectively The proceedings are not maintainable as per Section 72(6) of the Finance Act, 2011. Moreover, since IAC has examined and re-done the whole exercise again as mandated by Section 72 of the Finance Act, 2011 and did not raise any objection on eligibility, the eligibility questioned in SCN had become redundant. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Eligibility for exemption under Notification No.32/99 and subsequent Notifications No.69/2003-CE and 8/2004-CE. 2. Whether Shed No.15 and 36D, and Shed No.17 should be considered as independent units or extensions of existing units. 3. Bar of limitation and suppression of facts. 4. Validity of demand beyond the scope of the show cause notice. 5. Retrospective application of registration and exemption benefits. Detailed Analysis: 1. Eligibility for Exemption: The primary issue revolves around the appellant's eligibility for exemption under Notification No.32/99, which was rescinded and replaced by Notification No.8/04-CE. The appellant claimed that their sheds, Shed No.15 and 36D, were part of their factory that commenced production prior to 28.02.2001, thus entitling them to the benefits of the notification. The department, however, argued that these sheds began production after the cut-off date and were not eligible for the exemption. 2. Independent Units vs. Extensions: The dispute extends to whether Shed No.17 and Shed No.15 and 36D should be considered independent units or extensions of existing units. The appellant argued that these sheds were expansions of their existing units and should be treated as part of the same factory. The department contended that separate IEMs were filed for these sheds, indicating they were independent units. The Tribunal observed that common registration was granted by the Assistant Commissioner, suggesting that the sheds were considered part of the same unit. 3. Bar of Limitation and Suppression of Facts: The appellant argued that the demand was barred by limitation as they had applied for amendments to their registration, which was granted without any suppression of facts. The Tribunal noted that the department's knowledge of the facts and the acceptance of returns without objection implied that the extended period for demand could not be invoked. 4. Validity of Demand Beyond Scope of Show Cause Notice: The appellant contended that the Commissioner confirmed a demand exceeding the amount specified in the show cause notice, including Education Cess, which was not originally raised. The Tribunal found that the Commissioner had indeed traveled beyond the scope of the show cause notice. 5. Retrospective Application of Registration and Exemption Benefits: The Tribunal referred to various judgments, including Balkrishna Industries Ltd. and Escorts, which established that benefits of exemption could not be disallowed retrospectively if the department had registered the premises as one factory. The Tribunal also cited Grasim Industries Ltd., which held that premises treated as one factory under other statutes could not be considered separate under the Excise Act. Conclusion: The Tribunal concluded that the proceedings were not maintainable under Section 72(6) of the Finance Act, 2011, and that the eligibility questioned in the show cause notice had become redundant. Consequently, the impugned orders were set aside, and the appeals filed by the appellants were allowed with consequential relief. Order Pronounced: The order was pronounced in the open Court on 20 November 2019.
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