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2024 (11) TMI 54 - HC - Central ExciseExemption to new Industrial Undertakings / Units - Obtaining fresh license by the respondent after ban was lifted - Establishment of new industry or not - entitlement for benefit of Notification dated 25.04.2007 - old wood-based plywood industry, functioning at Jeypore prior to the ban imposed by the Apex Court. Whether Hon ble CESTAT has erred in law in holding that obtaining fresh license by the respondent after ban was lifted by the Hon ble Supreme Court on the basis of the report of the High Power Committee amounts to establishment of new industry and entitled to benefit of Notification dated 25.04.2007? - HELD THAT - From a bare perusal of the order of the CESTAT it is more than clear that the CESTAT has not held that the respondent has obtained a fresh licence after the ban had been lifted by the Hon ble Supreme Court on the basis of the report of the High Power Committee and, therefore, is entitled to benefit of the Notification dated 25.04.2007. In such circumstances, the substantial question of Law as framed by this Court is factually incorrect. Whether the findings of the LD Tribunal is perverse in holding the newly established industry, whereas admittedly M/s Sarda Plywood Industries Ltd, Jeypore is an old wood-based plywood industry, functioning at Jeypore prior to the ban imposed by the Apex Court? - HELD THAT - It cannot be held that the finding recorded by the CESTAT to the effect that the respondent has established a new industrial unit is perverse. The Assistant Commissioner and the Commissioner (Appeals) as well as the CESTAT have recorded their findings after taking into consideration the materials, which suggest that the respondent has established a new industrial unit, although on the same site. The Revenue has failed to produce any evidence contrary to the findings arrived at by the Assistant Commissioner and the Commissioner (Appeals) as well as the CESTAT, or in support of its stand that the respondent has not set up a new factory but has only renovated its old factory. The materials available on record reveal that the Assistant Commissioner, after visiting the respondent factory and after inspecting the documents, recorded a specific finding that the respondent unit is a new industrial unit which commenced commercial production after 01.04.2007. Apparently, the said finding of fact is based on the material and has rightly not been interfered with by the Commissioner (Appeals) as well as by the CESTAT. Thus, no substantial question of law arises in the present appeal. Hence, the appeal is dismissed.
Issues Involved:
1. Whether the CESTAT erred in law by considering the respondent's fresh license as the establishment of a new industry, thereby entitling them to the benefit of the Notification dated 25.04.2007. 2. Whether the findings of the CESTAT were perverse in holding that the respondent's unit was a newly established industry, despite its previous existence before the Supreme Court's ban. Detailed Analysis: Issue 1: CESTAT's Consideration of Fresh License as Establishment of New Industry The primary issue revolves around whether the respondent's acquisition of a fresh license after the Supreme Court lifted the ban constituted the establishment of a new industry, making the respondent eligible for tax exemption under Notification No. 20/2007-CE dated 25.04.2007. The High Court noted that the CESTAT did not explicitly state that the fresh license was granted based on the Supreme Court's decision or the High Power Committee's report. Instead, the CESTAT concluded that the respondent had established a new unit, considering the respondent's actions, such as surrendering the previous license and acquiring a new one, along with new machinery and fresh clearances. The court found that the substantial question of law regarding the CESTAT's alleged error was factually incorrect, as the CESTAT's decision was based on an evaluation of the factual matrix rather than a legal misinterpretation. Issue 2: Perverse Findings on the Establishment of a New Industry The second issue concerns whether the CESTAT's findings were perverse in determining the respondent's unit as a newly established industry. The court observed that the Assistant Commissioner, Commissioner (Appeals), and CESTAT all consistently found that the respondent had set up a new industrial unit, despite being located on the same site as the previous entity. This conclusion was drawn from substantial evidence, including the respondent's surrender of the old license, acquisition of new licenses, installation of new machinery, and commencement of commercial production after 01.04.2007. The court emphasized that the Revenue failed to provide contrary evidence or demonstrate that the respondent merely renovated an old factory. Consequently, the court held that the findings were not perverse, as they were supported by the materials on record. Conclusion: The High Court concluded that no substantial question of law arose in this appeal. The consistent findings by the lower authorities, based on factual evidence, were upheld. The appeal was dismissed, affirming the respondent's entitlement to the benefits under the Notification dated 25.04.2007, with no order as to costs.
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