2017 (6) TMI 850 - AT - Central Excise

Area based exemption - N/N. 56/2002-CE dated 14.11.2002 - denial on the ground that the factory is not located in the notified area covering by the notification, as they have mentioned that the factory is located in village Narwal Pain - Held that - the unit is situated at Khasra No.239/152, Tehsil Jammu and the original Bandobasti Khasra No.152 of village Narwal Pain, Jammu - Khasra No.152 is mentioned at Sr. No.2(l)(A)(2) against name of Industrial Area as Jammu Cantonment. The appellant s unit situated at Khasra No. 152 is eligible for exemption under N/N. 56/2002-CE dated 14.11.2002, as amended, as it falls under specified area as shown against Sr. No. 2(I) (A) (2). Consequently, the appellants are eligible for the refund claims. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of the geographical location of the factory for exemption under Notification No. 56/2002-CE.
2. Admissibility of evidence and validity of the show cause notice.

Interpretation of Geographical Location:
The case involved a dispute regarding the geographical location of the respondent's factory in Jammu & Kashmir for exemption under Notification No. 56/2002-CE. The Revenue challenged the ld. Commissioner (Appeals) order granting exemption based on the factory's location. The report from the Police Station was a crucial point of contention, indicating the factory was outside the Army Cantonment area. However, the Tribunal found that the report was not available at the time of the show cause notice, rendering it inadmissible as evidence. The Tribunal referred to a TRU Circular directing authorities to verify the factory's location from Tehsildar/land Revenue records. The Tribunal upheld the ld. Commissioner (Appeals) decision, emphasizing that the factory was situated in the specified area under the notification, thereby making the respondent eligible for exemption.

Validity of Show Cause Notice:
The Tribunal highlighted that the show cause notice issued to the respondent was defective as it did not include the report from the Police Station, which was later relied upon by the Revenue for the appeal. The Tribunal emphasized that the report was not part of the show cause notice, rendering it inadmissible as evidence. Additionally, the Tribunal noted that the ld. Commissioner (Appeals) correctly analyzed the factory's location based on the Tehsildar's report, determining that the respondent's unit fell within the specified area for exemption under Notification No. 56/2002-CE. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the respondent's entitlement to the exemption.

This detailed analysis of the judgment addresses the interpretation of the geographical location for exemption under the relevant notification and the admissibility of evidence in the context of the show cause notice, providing a comprehensive overview of the legal issues involved in the case.