2023 (6) TMI 949 - AT - Central Excise

Area based exemption - Set up of new unit at the same site / old site - Benefit on establishment of new unit as per N/N. 20/2007-CE Dated 25.04.2007 denied - case of Revenue is that when the ban was removed, the respondent applied for start of their unit on the same site, the same cannot be termed as new unit, so, they can not avail benefit of exemption Notification No.20/2007-CE Dated 25.04.2007 - HELD THAT - It is a fact on record that the unit of the respondent was functional prior to 12.12.1996, when the ban was imposed on the industry of the appellant. Thereafter the appellant surrendered their factory licence on 10.01.2002 and also surrendered their Central Excise registration on 10.04.2003. Moreover, machinery was also transferred to the Rajkot (Gujarat) factory and list of the machinery was also produced before us. Some plant and machinery was sold by the appellant, that details thereof was also placed on record. Director, Shri M.P.Pariwal also resigned on 20.03.2004 from Board of Directors. Thereafter, the appellant has obtained licence from office of the Divisional Forest Officer, Dibrugarh, Assam vide letter dated 06.08.2008, wherein it has been mentioned that in pursuant of the above, a fresh licence is being issued to your industry bearing No.Sl.No.DIB/PLY/JEIPORE/IE/21 dated 05.08.2008. The Ld.Counsel produced registration and licence to work a factory from Government of Assam dated 16.09.2008 and sanctioning of loan from North Eastern Development Finance Corporation Ltd. vide letter of sanction dated 09.04.2009. They have also produced certificate issued by District Industry and Commercial Centre, Dibrugarh, Assam. On going through the finding of the Ld.Commissioner(Appeals) in the impugned order and the documents placed here, which are evident that the respondent has established a new unit although at the same site. The respondent is entitled for benefit of exemption Notification No.20/2007-CE dated 25.04.2007 - Appeal of Revenue dismissed.

Summary

Issues involved: Appeal against order granting benefit under Notification No.20/2007-CE dated 25.04.2007 for excisable goods; Determination of eligibility for exemption; Interpretation of whether unit is new or renovated.

Issue 1: Background and Eligibility for Exemption

The respondent, a manufacturer of excisable goods, surrendered their Central Excise registration in 2002 due to a ban imposed by the Supreme Court. After the ban was lifted, the respondent set up a new factory, sought clearances, and applied for benefits under Notification No.20/2007-CE dated 25.04.2007. The adjudicating authority confirmed the unit as new, entitled to the exemption, and allowed a refund claim for duty paid. The Commissioner(Appeals) upheld this decision, granting the benefit. The Revenue appealed, arguing that the unit was not new as it was operational before the ban.

Issue 2: Interpretation of "New Unit"

The Revenue contended that the unit, operational before the ban, could not be considered new despite re-establishment at the same site post-ban removal. The respondent's representative supported the claim, presenting documents showing the establishment of a new unit with fresh clearances and registrations. The records indicated the closure and dismantling of the old factory, along with the establishment of a new unit with necessary approvals and licenses.

Issue 3: Decision and Ruling

Upon review, it was found that the respondent had indeed established a new unit at the same site, meeting the conditions for exemption under Notification No.20/2007-CE dated 25.04.2007. The impugned order granting the benefit was upheld, and the Revenue's appeal was dismissed. The Divisional Forest Officer's letter and the overall circumstances supported the conclusion that the unit was new, not merely renovated. The tribunal found no fault in the Commissioner(Appeals)'s decision and affirmed the entitlement to the exemption.