2017 (11) TMI 1390 - AT - Central Excise

Area Based exemption - N/N. 50/2003-CE dated 10.06.2003 - date of commercial production - relevant date - Held that - the commercial production in the factory of the appellant was not commenced before the cut of date of 31.03.2010. Consequently, the appellant will not be eligible for the benefit of area based exemption under N/N. 50/2003 - duty demand justified. Natural justice - appellant has raised the point that the impugned order has been passed without hearing him - Held that - the appellant was granted an opportunity for personal hearing on eight dates spanning the period 21.08.2014 to 28.01.2015. The show cause notice issued by the Revenue has also been served on the appellant - Revenue has taken all possible steps to put the appellant on notice regarding the proposed denial of the benefit of the notification. However, the appellant has chosen not to make use of the opportunity - principles of natural justice was duly followed. Appeal dismissed - decided against Appellant.

Summary

Issues:
1. Entitlement to area-based exemption under Notification No. 50/2003.
2. Allegation of non-commencement of commercial production before the cut-off date.
3. Validity of the impugned order passed without hearing the appellant.

Entitlement to Area-Based Exemption:
The appellant, engaged in manufacturing PCBs, availed the benefit of Notification No. 50/2003 for duty exemption. The appellant claimed to have set up a new unit in Uttarakhand in 2010 to avail the exemption. The appellant submitted documentation, including a Chartered Engineer certificate, purchase bills, bank statements, and transport details, to support their claim. However, investigations revealed discrepancies in the documents provided by the appellant, casting doubt on the authenticity of the claims. The tribunal concluded that the machines claimed to have been ordered were not actually transported to the factory premises, leading to the denial of the exemption benefit.

Allegation of Non-Commencement of Commercial Production:
The appellant asserted that commercial production started before the cut-off date of 31.03.2010, supported by a certificate from a Chartered Engineer. However, upon investigation, the Chartered Engineer denied issuing the certificate, stating it was false and fabricated. The tribunal found that the appellant failed to prove the commencement of commercial production before the specified date, leading to the rejection of their claim for exemption.

Validity of Impugned Order:
The appellant contended that the impugned order was passed without granting a proper hearing. The adjudicating authority recorded multiple opportunities for the appellant to present their case, but the appellant failed to utilize these opportunities effectively. The tribunal held that the Revenue had taken all necessary steps to notify the appellant of the denial of the exemption, and the appellant's failure to participate cannot be considered a denial of natural justice. Consequently, the tribunal upheld the impugned order, dismissing the appeal on the grounds of lack of entitlement to the exemption and non-commencement of commercial production within the stipulated timeframe.