2024 (9) TMI 691 - HC - Central Excise

Area Based Exemption - whether the respondent M/s Paraj Exim, who had purchased a unit from M/s Om Sai Motor Industries, Rudrapur was availing the benefit of exemption under the N/N. 50/2003-CE dated 10.06.2003, when they had taken over the unit from M/s Om Sai Motor Industries, Rudrapur on 02.11.2015? - HELD THAT - The factual report given by the Superintendent was that the gold and silver unit was availing the benefit of exemption Notification when it was transferred by M/s Om Sai Motor Industries. Since it was only for verification of this fact, and this report has been given by the Superintendent, and the appeal has been rightly dismissed on 22.08.2022. The Revenue has come up in appeal against the above said order. The factual aspect has attained finality, as the case had only been remanded to verify the factual aspect whether before the transfer of unit to the respondent, it was availing the benefit of area based exemption. Once this finding of fact is concluded till Tribunal that when it was transferred to Om Sai Motor Industries in the year 2015, they were already availing the benefit of exemption, hence the same benefit cannot be denied to the respondent. The learned CESTAT has also referred to the CBEC Circular No. 960/03/2012 dated 17.02.2012, whereby change of ownership or change of the factory premises does not debar the unit to avail the area based exemption. Since the unit was already availing the benefit of exemption when it was transferred to the respondent, the benefit of exemption was rightly assessed by the learned CESTAT in its order dated 08.01.2018. This Court does not find any merit in the present central excise appeal - Appeal dismissed.

Summary

Issues:
1. Appeal against order of Customs, Excise and Service Tax Appellate Tribunal.
2. Availing benefit of area-based exemption under Notification No. 50/2003-CE.
3. Remand order for verification of exemption status.
4. Interpretation of factual report and CBEC Circular.
5. Dismissal of appeal by learned CESTAT.

Analysis:
The case involved an appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding the availing of area-based exemption under Notification No. 50/2003-CE by a company. The Tribunal had remanded the matter to verify whether the company was availing the exemption when it purchased a unit from another company. The Assistant Commissioner, in a subsequent order, confirmed that the company was indeed availing the exemption and upheld this decision in response to an appeal. The Commissioner (Appeals) also affirmed this decision. The Revenue then appealed, but the CESTAT dismissed their appeal, noting that the factual report confirmed the company's exemption status at the time of transfer. The CESTAT referred to a CBEC Circular stating that a change in ownership or factory premises does not affect exemption eligibility. As the company was already availing the exemption before the transfer, the benefit was rightfully assessed by the CESTAT. Consequently, the High Court found no merit in the central excise appeal and dismissed it.

The key issue revolved around whether the company was availing the benefit of area-based exemption under Notification No. 50/2003-CE when it acquired a unit from another company. The Tribunal remanded the matter for verification, and subsequent orders confirmed the company's eligibility for the exemption. The CESTAT, in its dismissal of the Revenue's appeal, highlighted the importance of the factual report, which supported the company's exemption status at the time of transfer. Additionally, the CESTAT cited a CBEC Circular to emphasize that a change in ownership or factory premises does not impact exemption eligibility if the unit was already availing the benefit before the transfer. This interpretation guided the decision to uphold the exemption assessment by the CESTAT.

In conclusion, the High Court upheld the decision of the CESTAT, emphasizing the finality of the factual aspect regarding the company's exemption status at the time of transfer. The application of the CBEC Circular supported the assessment that the company was rightfully availing the exemption, leading to the dismissal of the Revenue's appeal. The Court found no merit in challenging the CESTAT's decision based on the established facts and legal interpretation.