2022 (10) TMI 263 - AT - Central Excise

Area Based Exemption - exemption from the whole of the duty of excise in regard to goods manufactured in specified areas in the States of Uttarakhand and Himachal Pradesh - date of change of ownership of the unit - date of filing of intimation by the appellant and required verification of these dates - N/N. 50/2003 CE dated 10.06.20032 - HELD THAT - The exemption under the notification is qua the unit and an eligible unit can add new products, new plant and machinery and can also transfer the unit to a new owner without affecting the exemption. The provisions of the notification do not place a bar or restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after the cut-off date and during the exemption period of ten years as per the notification - The appellant could have exercised option for availing the benefit of the notification even after the sunset clause. Sunset clause is only relevant for the purpose of eligibility and there is no bar for filing the declaration after the sunset clause. This is clear from the TRU letter dated 26.04.2012. It is seen that the appellant had purchased the entire unit, as is clear from the MOU itself. The agreement was for the transfer of the entire industrial property for a total consideration of 59,45,000/- which comprised plant and machinery also. Part of the said total consideration of Rs. 29,45,000/- related to sheds, for which the sale deed dated 14.08.2013 was executed and part comprised lease of land for which the lease deed of Rs. 29,26,376/- was executed. The balance amount was for plant and machinery. The appellant paid this entire amount of Rs. 59,45,000/- from its bank account, which is supported by the Certificate of the auditor certifying payment of entire amount as agreed - even the findings recorded by the Commissioner (Appeals) on reasons, other than the reason on which a finding was required to be given, are factually incorrect and against the terms of the notifications and the Circular. The denial of exemption to the appellant under the notification for these reasons cannot also be sustained. Once it is held that the appellant is entitled to claim exemption under the notification, all the three appeals deserve to be allowed as this is the core issue on which relief has been denied to the appellant in all the three appeals. Application disposed off.

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 50/2003-CE.
2. Date of filing the declaration for availing exemption.
3. Validity of subsequent actions taken by the appellant and ATSPL.
4. Scope of remand order by the Tribunal.
5. Compliance with procedural requirements.

Detailed Analysis:

1. Eligibility for Exemption under Notification No. 50/2003-CE:
The appeals questioned the eligibility for exemption from excise duty under Notification No. 50/2003-CE, which applies to units in specified areas of Uttarakhand and Himachal Pradesh. The notification exempts goods from excise duty if certain conditions are met, including the commencement of commercial production within specified dates and the filing of a declaration before the first clearance.

2. Date of Filing the Declaration for Availing Exemption:
The core dispute was whether the appellant filed the declaration on 27.08.2013 or 06.02.2015. The Tribunal had remanded the matter to the Assistant Commissioner to verify this date. The Assistant Commissioner found that the declaration was indeed filed on 27.08.2013, which was crucial for determining eligibility for the exemption.

3. Validity of Subsequent Actions Taken by the Appellant and ATSPL:
ATSPL initially claimed the exemption but later withdrew it by a letter dated 08.04.2010. The appellant took over the unit from ATSPL in 2013 and sought to continue the exemption. The Commissioner (Appeals) held that ATSPL's withdrawal nullified the initial claim, and the appellant, manufacturing different products, did not take over the same "unit" but merely the land and premises.

4. Scope of Remand Order by the Tribunal:
The Tribunal's remand order specifically directed the Assistant Commissioner to verify the date of filing the declaration. However, the Assistant Commissioner and Commissioner (Appeals) examined additional issues beyond this scope. The Tribunal clarified that the lower authority should not travel beyond the specific issue remanded, as per the precedent set in HI-Tech Arai Ltd. v/s Commissioner of Central Excise, Madurai.

5. Compliance with Procedural Requirements:
The appellant's compliance with procedural requirements, such as filing the declaration and exercising the option for exemption, was scrutinized. The Tribunal noted that the exemption under the notification is unit-specific, allowing for new products and machinery additions. The appellant's acquisition of the unit, including plant and machinery, was supported by the MoU and payment evidence.

Conclusion:
The Tribunal concluded that the appellant was entitled to the exemption under the notification, as the specific issue of the declaration date was decided in their favor. The Assistant Commissioner and Commissioner (Appeals) erred in examining additional issues beyond the remand order. The orders denying the exemption were set aside, and all three appeals were allowed. The Tribunal did not find it necessary to address the extended period of limitation due to the core issue's resolution.