2015 (8) TMI 296 - AT - Central Excise

Area based exemption - Denial of exemption claim under Notification No. 50/2003-CE dated 10/06/2003 - to deny exemption for the period prior to January 2008 on the ground that the appellant has not opted for exemption - Held that - The appellant is located in area which gives benefit of Notification No. 50/2003-CE i.e. area based exemption. Appellant is manufacturing the final product which is specified in the list for claiming exemption under the said notification. The appellant has filed in the list for claiming exemption under the said notification. The appellant has filed a declaration on 28/07/2006 declaring the goods which they are manufacturing and details of their unit. Appellant is regularly filing the details of their clearances during the impugned period periodically. On 15th January, 2008 a query was raised in response to the declaration filed by the appellant on 28th July 2006 for want of nature of inputs being used in manufacturing of final product which was also provided by the appellant vide their letter dated 25/01/2008 - As it is the understanding of the Department itself that non-supplying the details of nature of inputs to be used by the appellant prior to January 2008 was not a suppression in that case the denial of benefit of exemption notification shall become fatal to the appellant. - when the allegation of suppression has been dropped against the appellant, the appellant is entitled for benefit of exemption Notification No. 50/2003-CE during the impugned period also - Decided in favour of assessee.

Summary

Issues:
1. Denial of exemption under Notification No. 50/2003-CE.
2. Validity of show cause notice issued for denial of exemption.
3. Compliance with conditions for availing exemption.
4. Interpretation of nature of inputs requirement for exemption.
5. Application of case laws in exemption denial.

Analysis:
1. The appellant appealed against the denial of exemption under Notification No. 50/2003-CE, an area-based exemption. The appellant started their unit in April 2006 and filed a declaration in July 2006 for availing the exemption. A show cause notice was issued in 2008, alleging non-opting for exemption before January 2008. The Adjudicating Authority confirmed the demand for the period October 2007 to January 2008, citing suppression charges. The appellant contested this denial.

2. The appellant's counsel argued that all required details were filed timely, and any delay in providing input details should not affect exemption eligibility. Referring to a Tribunal case, it was highlighted that non-supplying input details initially does not invalidate exemption claims. The counsel emphasized that there was no intent to evade duty and suppression charges were unfounded, as acknowledged by the Commissioner.

3. The Revenue contended that the appellant failed to file necessary details initially, thus not entitled to exemption. Citing Supreme Court cases, it was argued that compliance with initial declaration requirements is essential for exemption eligibility. The Revenue relied on legal precedents to support their position.

4. The Tribunal noted that the appellant met the conditions for exemption by substantially complying, despite delayed input details submission. The Commissioner observed that the appellant did not suppress facts and believed they were correctly availing the exemption. The Tribunal referenced a similar case to support the view that initial filings can serve the purpose of later requirements.

5. After reviewing the case laws cited by the Revenue, the Tribunal found them irrelevant to the present case. As suppression charges were dropped and compliance was evident, the appellant was entitled to the exemption benefit for the disputed period. The Tribunal allowed the appeal, granting consequential relief to the appellant based on the findings and interpretations presented during the proceedings.