2024 (5) TMI 800 - AT - Central Excise

Area based exemption - subsequent demand of duty after disallowing the benefit of area based exemption under Notification No. 49-50/2003-CE - demand alongwith interst and penalty - HELD THAT - The identical issue has been considered by the Tribunal in the appellant s own case M/S AGV FENESTRATION PVT LTD VERSUS CCE-CHANDIGARH-I 2023 (12) TMI 563 - CESTAT CHANDIGARH and this Tribunal after considering all the submissions of both the parties has held that the appellant are entitled to the benefit of Notification No. 50/2003-CE dated 10.06.2003 for the period 20.06.2009 to 21.03.2010 - It was held in the case that the denial of benefit of notification 50/2003-CE dated 10.06.2003 for the period from 20.06.2009 to 21.03.2010 is not sustainable in law. As the Tribunal in the appellant s own case has held that the appellant was entitled to benefit of area based exemption under Notification No. 50/2003-CE, therefore subsequent demand for the period from 18.06.2009 to 21.03.2010 does not survive. Consequently, the impugned order is set aside by allowing the appeal of the appellant with consequential relief, if any, as per law. Appeal allowed.

Summary

Issues Involved:
1. Demand of duty after disallowing the benefit of area-based exemption under Notification No. 50/2003-CE.
2. Imposition of interest and penalty.

Summary:

1. Demand of duty after disallowing the benefit of area-based exemption under Notification No. 50/2003-CE:
The appellant, engaged in the manufacture of doors and windows, structural glazing systems, etc., was availing of an exemption u/s Notification No. 50/2003-CE. The Department contended that the appellant failed to file the required declaration before availing the exemption from 18.06.2009, filing it only on 22.03.2010. Consequently, a show cause notice dated 05.07.2011 demanded duty of Rs.70,54,981/- for the period from 18.06.2009 to 21.03.2010 along with interest and penalty. The Commissioner, in the order-in-original dated 07.10.2013, confirmed a duty demand of Rs.48,06,021/- after adjusting Cenvat Credit of Rs.22,48,960/-, along with interest u/s 11AB and a penalty of equal amount u/s 11AC. The appellant argued that they had filed the declaration on 18.06.2009 and had complied with the exemption notification requirements, but the Commissioner did not accept this plea.

2. Imposition of interest and penalty:
The Tribunal, referencing its Final Order No. 60706/2023 dated 11.12.2023, found that the appellant was entitled to the benefit of Notification No. 50/2003-CE for the period from 20.06.2009 to 21.03.2010. The Tribunal noted that the Department had not verified the appellant's declaration despite being informed. Citing previous judgments, the Tribunal emphasized that procedural non-compliance should not negate substantive benefits, especially for beneficial exemptions. The Tribunal concluded that the denial of the exemption was unsustainable, thereby invalidating the subsequent demand for duty, interest, and penalty. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief as per law.