2019 (1) TMI 6 - HC - Central Excise

Area based exemption - proof of filing of declaration - exemption from payment of Central Excise under the Notification No. 50/03-CE dated 10.06.2003 - whether the instant appeal raises a substantial question of law for adjudication by this Court? Held that - Whether the appellant filed the 2nd Declaration on 13.04.2005 or on 13.05.2005 is purely a question of fact. There is no gainsaying that an Exemption Notification ought to be construed strictly and the burden of proving its applicability lies on the assessee so as to establish that its case falls within the parameters of the exemption clause - Whosoever therefore seeks the benefit of exemption must always prove its admissibility. The appellant was obliged to establish that it had actually applied for the benefit of exemption under the Notification dated 10.06.2003 through 2nd Declaration filed on 13.04.2005 or that such a Declaration was available in the office of Assistant Commissioner Central Excise. The appellant has miserably failed to discharge such onus. A plain reading of the Grounds of Appeal reveals that even the appellant was not sure about the actual date of filing of alleged 2nd Declaration as the date of filing such Declaration claimed is 13.04.2005 whereas in the later part comprising Grounds of Appeal it is stated to be dated 13.05.2005 . The Postal Receipt may be relevant to assume that a letter was sent on 13.04.2005 but it falls short to prove the contents of the letter. The appellant has thus failed to discharge the initial onus cast on it. Such like disputes are essentially questions of fact and cannot be treated as substantial question of law for the purpose of maintainability of this appeal. It is well settled that substantial question of law would mean-of having substance essential real of sound worth important or considerable. It is to be understood as something in contradistinction with---technical of no substance or consequence or academic merely - thus whether a party fairly disclosed the facts or suppressed or gave selective information too are surely questions of fact and per se does not give rise to substantial question of law. Appeal dismissed.

Issues:
1. Eligibility for exemption under Notification No. 50/03-CE for a new Manufacturing Unit.
2. Exemption on specific goods under the Notification dated 10.06.2003.
3. Filing of Declaration for manufacturing exempted goods.
4. Error in the date of filing the Declaration and its impact on the case.
5. Maintainability of the appeal before the High Court under Section 35-G of the Central Excise Act, 1944.
6. Substantial question of law for adjudication by the High Court.

Eligibility for Exemption under Notification No. 50/03-CE:
The case involved an appeal against an order by the Customs, Excise & Service Tax Appellate Tribunal regarding the eligibility of a new Manufacturing Unit for exemption under Notification No. 50/03-CE. The Tribunal held that the Commissioner (Appeals) rightly allowed the exemption for goods not mentioned in the 'Negative List' of the Notification, despite declining exemption on 'After-Shave Lotion'.

Exemption on Specific Goods under Notification dated 10.06.2003:
The Tribunal found that the appellant failed to provide evidence of filing a Declaration for manufacturing exempted goods like 'Creams' and 'After-Shave Lotion'. As the Declaration was not received by the Assistant Commissioner, the Tribunal held that the appellant was not entitled to claim exemption on these additional goods, leading to the dismissal of both appeals.

Filing of Declaration for Manufacturing Exempted Goods:
The appellant filed a Review Application pointing out an error in the Tribunal's assumption regarding the date of filing the 2nd Declaration. Despite providing proof of filing the Declaration on '13.04.2005', the Tribunal dismissed the Review Application, stating that no Declaration was filed on '13.05.2005'.

Error in the Date of Filing the Declaration and its Impact:
The appellant contended that the Tribunal's error in assuming the date of filing the Declaration led to a denial of justice. However, the Court held that the date of filing the Declaration was a question of fact, and the appellant failed to prove its applicability for exemption under the Notification dated 10.06.2003.

Maintainability of the Appeal before the High Court:
The issue of maintainability of the appeal before the High Court under Section 35-G of the Central Excise Act was raised. The Court considered various decisions and concluded that no appeal can be entertained unless it involves a substantial question of law, which needed to be determined in this case.

Substantial Question of Law for Adjudication by the High Court:
The appellant argued that the error in assuming the date of filing the Declaration constituted a substantial question of law. However, the Court disagreed, stating that such disputes are questions of fact and do not qualify as substantial questions of law. The Court dismissed the appeal, emphasizing that the burden of proving exemption lies on the assessee, and failing to do so led to the dismissal of the appeal.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the case and the Court's decision on each issue.

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