2018 (2) TMI 75 - AT - Central Excise

Area Based Exemption - N/N. 15/2003-CE dated 10.06.2003 - appellant has filed declaration and claimed the benefits of the Notification on 29.03.2010, and claimed immediately thereafter, i.e., on 30.03.2010 that the commercial production has been started - Held that - the evidences produced by the department do not establish the allegation that the appellant has failed to commence commercial production before 31.03.2010. The genuineness of the first consignment of 10 Multimedia Speakers manufactured prior to 31.03.2010 is established - appellant is entitled to the benefit of notification - appeal allowed.

Summary

Issues:
Claim of Area Based Exemption under Notification No. 15/2003-CE - Denial of benefit - Duty demand - Interest and penalty imposition - Commencement of commercial production before 31.03.2010 - Verification by Central Excise Officers - Discrepancies in records - Evidence submission - Allegation of non-starting of commercial production - Procurement of raw materials and capital goods - Clearance of goods to M/s Real Electronics - Letter of permission from brand holders - Purchase of testing equipments - Appeal against impugned order.

Analysis:
The appellant, having a factory in Haridwar, filed a declaration under Notification No. 15/2003-CE for Area Based Exemption from Central Excise Duty, claiming benefits for commencing commercial production before 31.03.2010. Central Excise Officers visited the factory, leading to a show cause notice denying benefits and demanding duty, interest, and penalty. The appellant contended that they started production on 30.03.2010, providing necessary details and evidence. The department alleged non-commencement of production before the deadline, highlighting discrepancies in records and lack of brand holders' permission letter. The Tribunal noted the procurement of raw materials and capital goods before 31.03.2010, clearance of goods, and statements confirming production commencement. Despite departmental allegations, the Tribunal found the appellant entitled to Notification benefits, setting aside the impugned order and allowing the appeal.

The Tribunal observed that the appellant's procurement records and statements from witnesses supported the claim of commencing commercial production before 31.03.2010. Despite departmental contentions regarding testing equipment purchase post-deadline and brand holders' permission, the Tribunal found the evidence presented by the appellant sufficient to establish production initiation. The Tribunal emphasized the importance of verifying genuine production commencement, considering the documents submitted by the appellant, and concluded in favor of the appellant's entitlement to the Notification benefits.

The Tribunal's analysis focused on the evidence provided by both parties, emphasizing the significance of the appellant's procurement records, witness statements, and clearance of goods to substantiate the claim of commencing commercial production before the specified deadline. While addressing the department's allegations, the Tribunal found the appellant's evidence credible, leading to the decision to set aside the impugned order and grant the appellant the benefits under Notification No. 15/2003-CE. The Tribunal's thorough examination of the facts and circumstances highlighted the importance of substantiating claims with concrete evidence to establish entitlement to statutory benefits, ultimately ruling in favor of the appellant based on the presented documentation and witness statements.