2023 (10) TMI 1162 - AT - Central Excise

Area based exemption under N/N. 50/2003-CE - non-fulfilment of mandatory condition of the notification that the unit must have commenced its commercial production on or before 31.03.2010 - amount involved in the appeal being less than prescribed threshold limit under litigation policy - HELD THAT - Both the authorities have considered the evidence produced and concluded that commercial production was started prior to 31.03.2010. Even a single clearance made by the Respondent would have justified the start of production by the Respondent - Further, this issue as observed by Commissioner (Appeals) has been settled in favour of the Respondent by the decision in case of CCE VERSUS M/S HARI CHAND SHRI GOPAL 2010 (11) TMI 13 - SUPREME COURT . Revenue has not contradicted the said finding of Commissioner (Appeals). There are no merits in this appeal which could have been dismissed for the amount involved being less than prescribed threshold limit under litigation policy. Appeal filed by the revenue is dismissed.

Summary

Issues Involved:
1. Entitlement to exemption under Notification No.50/2003-CE.
2. Compliance with the condition of commercial production commencement before the cut-off date.
3. Evaluation of documentary evidence and verification reports.

Summary:

Entitlement to Exemption under Notification No.50/2003-CE:
The Respondent set up a factory in Uttarakhand for manufacturing Safety Head Gear and commenced commercial production in May 2009. They applied for exemption from central excise duty under Notification No.50/2003-CE, which provides a ten-year exemption for units in specified areas commencing production before 31.03.2010. The Department initially denied the exemption, citing non-compliance with the notification's conditions.

Compliance with the Condition of Commercial Production Commencement Before the Cut-off Date:
The Department issued a show cause notice on 14.03.2011, proposing to deny the exemption, arguing that the Respondent had not commenced commercial production by 31.03.2010. The Respondent provided statutory documentary evidence, including purchase bills, VAT forms, NOC from the Pollution Control Department, and electricity bills, to demonstrate that production had started in May 2009.

Evaluation of Documentary Evidence and Verification Reports:
The Assistant Commissioner, after considering the evidence and verification reports, granted the exemption effective from 22.03.2010, computing the ten-year period from the commencement of production on 12.05.2009. The Commissioner (Appeals) upheld this decision, noting that the Department failed to provide cogent evidence to contradict the Respondent's claim of commencing production before 31.03.2010.

Conclusion:
The Tribunal reviewed the Order-in-Original and Order-in-Appeal, finding that both authorities had adequately considered the evidence and concluded that commercial production started before the cut-off date. The Tribunal referenced the Supreme Court's judgment in Commissioner of Central Excise, New Delhi v/s Hari Chand Shri Gopal and Ors., emphasizing that the mandatory conditions of the exemption notification had been fulfilled. The Tribunal dismissed the Department's appeal due to a lack of merit and upheld the Respondent's entitlement to the exemption under Notification No.50/2003-CE.