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2023 (8) TMI 1230 - AT - Central ExciseMaintainability of appeal - monetary limit involved in the appeal - Area Based exemption - failure to fulfill the mandatory condition of starting Commercial production on or before 31.03.2010 - recovery of Central Excise duty alongwith interest and penalty - HELD THAT - The appeal memo, show cause notice and all the documents it is quite evident that the total amount of demand in the said show cause notice is only Rs.20,311/-. Ideally this appeal should be dismissed as per the litigation policy, the threshold monetary limit for filing the appeal by revenue is Rs. 50 lakhs. As per F.No.390/Misc/116/2017-JC dated 22 August, 2019 revenue authorities have been directed to not file appeals before the amount (50 lakhs) and all appeals that had been filed in past were to be withdrawn. In this appeal also revenue do not dispute the invoice No.01 dated 30 March, 2010 but only say that being for an amount was only for purported clearance of goods availed at Rs.1,101/- Even a single clearance would made by the respondent would have justified the start of production by the respondent. There are no merits in this appeal which could have been dismissed for the amount involved being less than prescribed threshold limit under litigation policy - Appeal filed by the revenue is dismissed.
Issues involved:
The issues involved in the judgment are: 1. Denial of benefit of exemption of central Excise Duty under Notification No. 50/2003-CE dated 10.06.2003 for failure to start commercial production before 31.03.2010. 2. Demand and recovery of Central Excise duty for goods manufactured and cleared during April 2010 to December 2010. 3. Imposition of penalty under rule 25 of the Central Excise Rules, 2002. 4. Demand and recovery of interest under Section 11AB of the Central Excise Act, 1944. Issue 1: Denial of benefit of exemption under Notification No. 50/2003-CE: The respondent, a manufacturing unit in Pantnagar, claimed exemption under Notification No. 50/2003-CE dated 10 June, 2003, for commencing commercial production before 31.03.2010. The Assistant Commissioner conducted visits on 07 April, 2010, and 8 April, 2010, finding no manufacturing activities. The Original Authority dropped the demands made in the show cause notice, concluding that the respondent had indeed started production before 31.03.2010. The Commissioner (Appeals) upheld this decision, noting that the respondent had submitted various documents supporting their claim for exemption. The Commissioner found that the department failed to provide evidence that the production had not commenced before 31.03.2010, as claimed by the respondent. The judgment cited relevant legal principles emphasizing that conditions for exemptions must be strictly complied with, and the burden of proof lies on the party claiming exemption. Issue 2: Demand and recovery of Central Excise duty: The show cause notice demanded Central Excise duty of Rs.20,311 for goods cleared from April 2010 to December 2010. The Original Authority dropped these demands, and the Commissioner (Appeals) upheld this decision. The Commissioner found that the respondent had fulfilled the mandatory requirement of starting production before 31.03.2010, as per the exemption notification, and the department failed to provide sufficient evidence to the contrary. The judgment emphasized that the absence of production activity during specific dates did not conclusively prove non-fulfillment of exemption conditions. Issue 3: Imposition of penalty under rule 25 of the Central Excise Rules, 2002: The penalty under rule 25 of the Central Excise Rules, 2002, was not imposed as the Original Authority and Commissioner (Appeals) found in favor of the respondent, determining that they had met the conditions for exemption under Notification No. 50/2003-CE dated 10.06.2003. The judgment highlighted the importance of providing cogent evidence to support allegations of non-compliance with exemption conditions. Issue 4: Demand and recovery of interest under Section 11AB of the Central Excise Act, 1944: The demand and recovery of interest under Section 11AB of the Central Excise Act, 1944, were not upheld as the authorities determined that the respondent had indeed commenced commercial production before the stipulated date of 31.03.2010. The judgment reiterated the requirement for strict compliance with exemption conditions and the need for corroborative evidence to support allegations of non-compliance.
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