2019 (1) TMI 904 - AT - Central Excise

Ara based exemption - denial of benefit on the ground that basic and mandatory requirement of the Notification No.50/2003-CE dated 10.06.2003 not fulfilled - Held that - The ld. Commissioner has given cogent finding that the respondent in the year 2007-2008 brought capital goods from the Noida Unit worth ₹ 3.50 thousand. Further, they have shown purchase in that year worth ₹ 1.50 lakh and further, they have incurred expenditure on wages and power-fuel. Further, they have also cleared the goods manufactured by them. As such, the evidence of commercial production is established. It is also held that the appellant had given due intimation to the Revenue dated 14.01.2013 along with copy of clearance dated 4.01.2013. There is no adverse inspection report or finding to the facts as contended by the assessee, and as such, the denial of exemption is without any basis - appeal dismissed - decided against appellant.

Summary

Issues:
- Denial of exemption under Notification No.50/2003-CE to the respondent/assessee.

Analysis:
The case revolved around the denial of exemption under Notification No.50/2003-CE to the respondent/assessee. The respondent, engaged in manufacturing and clearance of automobile parts, acquired assets of M/s. Satyam Mfg. Industries (SMI) and sought exemption under the notification. The Adjudicating Authority initially denied the exemption citing anomalies in financial accounts. However, the Commissioner (Appeals) found in favor of the respondent, noting evidence of commercial production in 2007-2008 and compliance with required procedures. The Commissioner held that the change in ownership in 2012 was duly intimated, and the respondent fulfilled all necessary conditions as mandated by law. The Commissioner concluded that the grounds for denial of exemption were not sustainable, and the respondent correctly availed the exemption under the notification.

The Revenue appealed the Commissioner's decision, arguing that the single invoice showing clearance of goods in 2008 could not be considered as commercial production. They also highlighted the lack of power connection during a specific period, asserting that production was not possible without power. However, the Tribunal upheld the Commissioner's findings, emphasizing that the respondent had indeed engaged in commercial production in 2007-2008, evidenced by capital goods acquisition, purchases, expenses, and clearance of goods. The Tribunal noted that the respondent had provided intimation to the Revenue and no adverse inspection report was found. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the respondent's entitlement to the exemption and consequential benefits.

In conclusion, the Tribunal's decision upheld the Commissioner's ruling, emphasizing the respondent's compliance with legal requirements and the establishment of commercial production in the relevant period. The denial of exemption was deemed unfounded, and the respondent was granted the benefit under Notification No.50/2003-CE.