2020 (3) TMI 524 - AT - Central Excise

Refund granted under N/N. 39/2001-CE dated 31.07.2001 - recovery of refund sought on the ground that the production of these products were not started on declared dated 14.01.2005 - also alleged in SCN that the plant and machinery certified by the committee does not include the plant machineries subsequently installed and used for the manufacture of subject goods. HELD THAT - The Ld. Commissioner in the adjudication order regarding the factual aspect that whether the plant and machinery were installed as on 31.12.2005 only relied upon the Assistant Commissioner s order in an identical case, however, he has not verified the facts on the basis of documents that whether the machineries were installed as on 31.12.2005. The finding of the Commissioner with reference to the Board Circular dated 10.07.2008 to the extent that even if the production is started after the date i.e. 14.01.2005, but if the Plant and Machinery were installed as on 31.12.2005, the benefit of the notification 39/2001-CE is prima facie available appears to be prima facie correct. The learned adjudicating authority decided the entire matter relying on the Tribunal s remand order dated 27.10.2015. The period of that case was different from the period of this case therefore facts of each case must be verified independently - The adjudicating authority has not verified the facts in the context of this case. The vital fact which needs to be verified is that whether the goods on which exemption was claimed were manufactured from the plant machinery installed prior to the commencement of production thereof i.e. 14.01.2005 or they were installed after 14.01.2005. The matter needs re-examination - appeal allowed by way of remand.

Summary

Issues:
Revenue appeal against dropping of proceedings for recovery of refund under notification no. 39/2001-CE; Interpretation of plant and machinery installation dates for exemption eligibility.

Analysis:
The appeal involved a challenge by the revenue against the dropping of proceedings related to the recovery of a refund granted under notification no. 39/2001-CE. The adjudicating authority had dropped the proceedings based on the argument that although production commenced after a specific date, it was done using plant and machinery installed before a certain cut-off date. This decision was supported by a board circular indicating that if the plant and machinery were installed by a certain date, even if production started later, the exemption would apply. The revenue contended that the adjudicating authority failed to verify whether the machinery used for production post-dated the installation cut-off date, leading to serious flaws in the order.

The respondent, represented by counsel, argued that a similar issue had been decided in their favor in a previous case where the matter was remanded and subsequently decided in their favor. The respondent asserted that the issue had already been settled in their favor based on previous decisions.

Upon hearing both sides and examining the records, the tribunal found that while the adjudicating authority had relied on previous orders and a board circular, there was a lack of verification regarding whether the machinery used post-dated the installation cut-off date. The tribunal acknowledged the prima facie correctness of the board circular's interpretation but emphasized the need for independent verification of facts in each case. As the adjudicating authority had not verified crucial facts regarding the installation dates of the machinery, the tribunal decided to set aside the impugned order and remand the matter for a fresh examination. The tribunal directed the adjudicating authority to pass a reasoned order within three months, ensuring the respondent's right to a personal hearing.

In conclusion, the tribunal's decision highlighted the importance of independently verifying crucial facts in each case and directed a fresh examination to determine the eligibility for exemption based on the installation dates of plant and machinery used in production.