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TMI Blog2013 (10) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... r, in this case, there is no dispute that as on 31.3.2010, there was neither any manufacture of finished products nor any such manufacture had been recorded in the RG -I register and Shri Sunil Bhardwaj in his statement dated 17.4.2010 has categorically stated that they have not started maintaining any-stock register for finished products as no production was undertaken by them till date, which shows even till 17.4.2010 and there was no production. - prima facie case is not in favor of assessee - 50% of the demand ordered to be deposited - stay granted partly. - Excise Appeal Nos.3392 - 3393 of 2012 - Stay Order No.59003-59004/ 2013 - Dated:- 13-9-2013 - Archana Wadhwa And Sahab Singh, JJ. For the Appellant : Shri K K Anand , Adv. For the Respondent : Shri A K Jain, Jt. CDR PER : Archana Wadhwa The prayer in both the stay petitions is to dispense with the condition of pre-deposit of duty of Rs . 1,76,87,618/- and Rs . 21,15,878/- and penalties of identical amount imposed upon the appellant/applicant. 2. As per facts on record, we note that the appellant is a unit located in the area of Hardwar and engaged in the manufacture of DVD EMPEG Cards and DVD Players ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly commenced the production on 30.03.2010, they are entitled to the benefit of the notification. He also submits that during the month of April 2010 itself they have cleared 76,000 PCBs. 6. We find that the appellant had admittedly filed a declaration on 31.03.2010 indicating that they have initiated commercial production. If the revenue had visited the factory of the appellant on the same very day, it would have become clear as to whether the commercial production was commenced or not. The revenue having not done that, reliance has to be placed on other circumstantial evidences. We also note that the expression used in the said notification is "commencement" of the commercial production and not the actual production of the final product in a fully manufactured shape. In any case, we note that the appellants have placed on record a letter dated 31.03.2010 issued by Regional Manager, State Infrastructure and Industrial Development Corporation of Uttarakhand Limited, addressed to the appellant stating as under :- "The Principal Officer, M/s Simplex Electronics Pvt. Ltd. 43, Sector 6A , IIE , SIDCUL Hardwar Uttarakhand . Sub: Regarding inspection of premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2010 is entitled for exemption in respect of the goods manufactured by them. The dispute in the appeal relates to whether the appellant is eligible for exemption under Notification No.50 /2003 dated 10.6.03 or not. The appellant filed a declaration with the excise, authorities on 31st March, 2010 intimating the intention of availment of exemption under the said notification. The officers of the Central Excise visited their factory premises on 17th April, 2012 and during the course of verification, it was observed by the officers that the unit was running in a make shift arrangement. Statement of Shri Sunil Bhardwaj authorized signatory of appellant was recorded on 17.4.2010 in which he has categorically stated that "we have neither made any issue slip of the raw materials nor started maintaining any stock register for finished goods as no production has been undertaken by us till date. I assure you that as and when raw materials are issued for regular production and commercial production of any of the finished goods is commenced in each unit, we would start maintaining the relevant record". 3. I find that in view of the admitted position by the authorized signatory in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such letter from SIDCUL and they requested for one moth time from the Commissioner. 6(ii) From this letter, it is not clear, on what basis the officers from the Sidhool issued letter without verifying the fact of receipt of raw material in their factory as declared by the appellants in their declaration. 7. Under Notification No. 50/2003, the exemption is available to the manufacturer on finished excisable goods and under para 2(a) of the said Notification, exemption is applicable only to the units which had commenced commercial production not later than 31st March, 2010. I find the commercial production in clause 2(a) refers to the commercial production of the finished goods as the exemption in the notification is in respect of finished goods. It is on record that no finished goods were manufactured by 31st March, 2010 by the appellants. 10. In view of the above, I am of the view that appellant does not have a prima facie case for waiver of pre-deposit and accordingly in my view 50% of the duty is required to be pre-deposited by the appellants within 8 weeks for hearing the appeal. And on due compliance, there shall be waiver and stay of the balance amount of duty, intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Sunil Bhardwaj , Authorized Signatory of the appellant, and on examining condition of the machinery and other records, the central excise officers were of the view that the appellant had not commenced commercial production on 31.3.2010. In this regard, departmental officers recorded the statement of Shri Sunil Bhardwaj , authorized Signatory of the appellant, wherein he stated that the unit has neither made issue slips of the raw materials nor has started maintaining any stock register for finished goods, as no production has been undertaken by them till date and as and when raw materials are issued for regular production and commercial production of any of the finished goods is commenced, they would start maintaining the relevant records. The officers also found that one of the raw materials required for manufacture of the finished products was not available in the factory till 31.3.2010 as there is no receipt of any kind of soldering paste or wire in the unit as on 31.3.2010. Besides this, the officers found that one of the items of the capital goods required for manufacture is Pneumatic Screw Driver, which was not available with the appellant till the date of the officers visi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perations on or before 31.3.2010 and for this, it is not necessary that there must be manufacture and clearance of finished product in commercial quantities on that day, that is for commencement of commercial production, what is required is that the manufacturing operations must start, that the appellant in this case had started manufacturing operations on 31.3.2010 as is evident from the letter dated 31.3.2010 of the Regional Manager, State Infrastructure and Industrial Development Corporation, Uttrakhand to the appellant, wherein it has been clearly stated that the officers of the Corporation had visited the appellant's unit on 30.03.2010 and had found that commercial production of electronic goods is going in the premises, that when the jurisdictional Industries officers have categorically stated that the appellant had commenced commercial production on 30.3.2010, there is no justification for doubting the correctness of this letter, that just because Soldering paste or soldering wires had not been received till 31.3.2010, it cannot be concluded that manufacturing operations had not been started as this input is require at a later stage, that just because Pneumatic screw drivers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egister were being maintained, and that in view of this, it cannot be said that the appellant had commenced commercial production as on 31.3.2010. She pointed out to the statement dated 17.4.2010 of Shri Sunil Bhardwaj wherein he has categorically stated that the appellant have not made any issue slips of raw materials nor have started maintenance of Finished products register as no production has been started by them till that date She also emphasized that since Shri Sunil Bhardwaj has not retracted his statement and the same is also corroborated by other evidence, there is no justification for his cross examination and the request has been correctly denied and as such, denial of cross examination does not result in violation of the principles of natural justice. She also pleaded that the question of permitting cross examination of Shri Sunil Bhardwaj has been specifically dealt with by the Commissioner in para 4.21 of the impugned order and he has given good and valid reasons for not permitting the cross examination. She also pleaded that the letter dated 31.3.2010 of the Regional Manager, State Infrastructure Development Corporation addressed to the appellant mentioning commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of finished products in commercial quantity and that mere starting of the manufacturing operations would amount to commencement of commercial production. 7.1 I am of prima facie view that the commencement of commercial production means starting of the manufacture of the finished products on commercial scale, which is preceded by trial production and installation of complete plant machinery and on that day the plant must be ready in all respects for manufacture of finished product in commercial quantity and all raw materials, consumables, etc. required for manufacture are available. When as on 31.3.2010 soldering paste/wire, an important input for mounting components on the printed circuit board was not there and pneumatic screw drivers required for fixing screws mechanically were also not available as a result of which the screws could be fixed only manually, it is doubtful as to whether the commercial production could be started on that day. Moreover, in this case, there is no dispute that as on 31.3.2010, there was neither any manufacture of finished products nor any such manufacture had been recorded in the RG -I register and Shri Sunil Bhardwaj in his statement dated 17.4.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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