2018 (12) TMI 82 - AT - Central Excise

Benefit of area based exemption - denied on the ground that the appellant has not exercised option to avail benefit in writing before availing the exemption under N/N. 50/2003-CE dated 10.06.2003 - Held that - The appellant has intimated the Range Superintendent, Parwanoo, Himachal Pradesh for availing the benefit of exemption under N/N. 50/2003-CE dated 10.06.2003. On 29.03.2005 through registered post and as per the reply to the RTI filed by the appellant, it has been stated that during the period 15.02.2005 to 10.01.2006, the records of inward DAK were not maintained in the office of the Deputy Commissioner, Central Excise Division, Shimla. As the appellant has been able to produce the intimation sent to the department for availing benefit of exemption notification vide letter dated 29.03.2005 - Benefit of exemption notification cannot be denied to the appellant as no other fault has been found against the appellant to deny benefit of exemption Notification by the adjudicating authority. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of benefit under Notification No. 50/2003-CE due to failure to exercise option in writing before availing exemption.

Analysis:
The appellant, engaged in manufacturing excisable goods, appealed against the denial of exemption under Notification No. 50/2003-CE as they did not exercise the option in writing before availing the exemption. The appellant cleared goods without duty payment from January 2004 to March 2008 under the said notification. A show cause notice was issued, alleging non-compliance with the condition of providing a written undertaking to avail the exemption. The matter was adjudicated, and the appellant was found to have failed to exercise the requisite option, leading to the denial of exemption, confirmation of demand, imposition of penalty, and subsequent appeal.

The appellant contended that they had indeed exercised the option by sending a letter dated 29.03.2005 via registered post to the Central Excise Division in Himachal Pradesh, complying with the notification's requirement. Additionally, the appellant had sought information through RTI, revealing that no records were maintained by the department during the relevant period. The appellant argued that due to the lack of records, the benefit of the notification should not be denied.

Upon hearing both parties, the Tribunal examined the documents, including the intimation sent by the appellant to the Range Superintendent for availing the exemption under Notification No. 50/2003-CE on 29.03.2005. It was noted that the appellant had fulfilled the requirement of intimating the department. The RTI response confirmed the absence of maintained records during a specific period. As no other fault was found against the appellant, the Tribunal held that the benefit of the exemption could not be denied based on the department's failure to maintain records. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

Therefore, the Tribunal's decision was in favor of the appellant, emphasizing the importance of compliance with procedural requirements and holding the revenue accountable for their failure to maintain essential records.