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TMI Blog2018 (4) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... duction was commenced on 30 March, 2010, the appellant have also made clearances of MDF board on 31 March, 2010, to Raghuraji Agro Industries Pvt. Ltd. Further the stock of MDF boards with appellants brand were found at the premises of the said Raghuraji Agro Industries Pvt. Ltd. during follow-up investigation and drawl of Panchnama on 21 June, 2010. The verification report of the Superintendent of Central Excise Mr. A.K. Ashthana also supports the commencement of commercial production and that production was going on when he visited during the middle of April 2010 when semi-finished goods were being converted into finished goods - Further it is evident that the total power available with the appellant drawn from the electric company plus from the captive DG sets were sufficient for production in the new Unit-II from 30 March, 2010. Further, installation of plant and machinery have been completed much before 31 March, 2010 which is not disputed and supported by the intimations given to the Department in the month of March 2010 prior to commencement of commercial production. The learned Commissioner have selectively relied upon the evidence on record, thus his findings a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 2.3. Prior to commencement of commercial production from Unit-II, Greenply filed declaration dated 9/16.03.2010 (copy filed in the paper book) with the Assistant Commissioner of Central Excise, Rampur and Superintendent of Central Excise, Rudrapur, furnishing details in terms of Notification No.50/2003-CE. This declaration gave details of location of unit, raw materials required for the manufacture of finished products, details of finished products, details of plant and machinery and fixed assets, project report, etc. 2.4. Greenply commenced commercial production on 30th March 2010 and cleared the first set of finished goods under the cover of invoices on 31st March 2010. Accordingly, the Department was intimated about the commencement of commercial production on 31st March 2010. The production continued till 2nd April, 2010, when some machinery broke down and the production was stopped for some days. The appellant undertook automation of the entire plant thereafter and accordingly production recommenced in October, 2010. 3.1. The DGCEI officials visited the Unit-II on 21st May 2010 and drew a Panchnama. Statement was also recorded from the various officials of Greenply. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial units existing before the 7th day of January 2003, in areas mentioned in Annexure-2 but which have undertaken substantial expansion by way of increase in the installed capacity by not less than 25% on or after the 7th day of January 2003, but have commenced commercial production from such expanded capacity not later than the 31st day of March 2010. 6. In the present case we are concerned with only Clause-a of Para-2 of the Notification. Thus, what is required in terms of Clause-a, is that the new industrial unit should have commenced commercial production not later than 31st day of March 2010. 7. The learned counsel further urges that the following documents which are contemporaneous corroborate the fact that the appellant had started commercial production in its Unit-II before 31st day of March 2010: (a) Certificate dated 1st September, 2010, issued by DIPB, Govt. of India. (b) Certificate dated 09.11.2017 issued by District Industries Centre, Uddhamsingh Nagar. (c) Greeply‟s letter dated 31st March 2010 addressed to Asst. Commissione of Central Excise, Rampur Division. (d) Invoices dated 31st March 2010 issued by Greenply in favour of Raghurajji Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel further submits what is relevant for exemption under the Notification is, the commencement of commercial production on or before 31 March, 2010. If the fact of commencement of commercial production before 31 March, 2010 is established then any event or happening subsequent to that date is of no relevance or significance for eligibility under the Notification. Green Ply/appellant duly intimated to the Department in the middle of March 2010 itself that they are ready for production and indicated the date of commencement of commercial production as 31 March, 2010. Further upon commencement of commercial production on 30 March, 2010, they intimated the Department on that very day itself. The production continued uninterrupted for the next three days and thereafter due to break down in the machinery, the production stopped on 02 April, 2010. Nothing stopped the Department from visiting the unit from 30 March, 2010 to 01 April, 2010, to ascertain whether the commercial production had indeed commenced as required. If the Department can seek verification report later in the month of April, 2010, from the Range Superintendent, they could have done so earlier on 30/31 M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant Green Ply. The learned Commissioner have ignored this material evidence and did not even place the documents as part of the relied upon documents (RUD). It is further stated that appellants obtained the copy of Panchnama and the test reports through RTI Application, which conclusively establishes the biased manner in which the entire proceedings were conducted by the Department. The DGCEI had investigated from the buyer vide the Panchnama dated 21June, 2010 and found the stock of finished goods in the premises of that buyer with marking of appellant's board/brand name Panelmax. Even samples of such MDF boards were drawn. Samples from appellant's units were also drawn so as to verify that the goods lying at the buyer‟s premises and that drawn from the appellant's unit match or not. Both the samples were sent to the Wood Anatomy Discipline of Forest Research Institute, Dehradun. Appellants have produced documents for clearance on 31 March, 2010 inter-alia including GR note dated 31 March, 2010 to establish transportation from Unit-II to the buyer‟s premises, which is not disputed. Learned Commissioner have erred to take notice that the DGCEI have with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Rajeev Kumar Verma, Inspector visited the Unit-II of the appellants on 13 April, 2010 and conducted verification. A report dated 13 April, 2010 was prepared and sent by the Superintendent to the Assistant Commissioner, Rampur, a copy of which the appellant could obtain under RTI Application. Perusal of the report reveals that the details have been physically verified by the visiting officers as well as the records and found to be in order. The said Superintendent also reported that the commercial production has been commenced before the cut-off date that is 31 March, 2010. They had also verified at the time of visit, the manufacturing activity of MDF boards was going on and the stock of manufactured finished goods lying was verified with the SAP records being maintained by the unit under Code ID 2700 in SAP. The Superintendent also reported that the appellant Unit-II is eligible for exemption under said Notification. The report also states that the appellant had been procuring raw material since beginning of March 2010 and the sales invoices of finished goods were issued on 31 March, 2010 and further till the time of visit, three invoices have been issued. It was clearly report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Thus, the fact of commencement of commercial production on or before the cut-off date of 31 March, 2010, is established beyond doubt in the appellant's new unit and thus the new Unit-II is eligible for exemption for a period of 10 years from 30 March, 2010. 17. Further, there is no dispute regarding start of energy plant, wood chipper, defibrator by 31 March, 2010. Documents reveal that energy plant was commissioned on 31 March, 2010 and that steam, thermal oil and flue gas were being produced by 31 March, 2010. All these products are excisable and fall under the Central Excise Tariff. Hence, production of these alone would establish eligibility for exemption under the Notification. Thus all the conditions of the notification being met in view of the start of commercial production on 30 March, 2010 and clearance of the finished products on and from 31 March, 2010, renders the finding of Commissioner as erroneous and fit to be set aside. Further reliance is placed on the ruling of this Tribunal in the case of CCE vs. Vishwakarma Paper Board Ltd. reported in 2010 (261) ELT 815 (Tri.-Del.), which ruling was upheld by the Uttarakhand High Court interpreting the very same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the exemption is available. 19. The requirement under Notification is commencement of commercial production. The term Commencement of Commercial Production has not been defined in the Notification/Act or the Rules made thereunder. When the law does not define any word or phrase, then the ordinary meaning of such word or phrase is to be used for understanding the intent and purpose of law. Dictionary meaning of the term commencement‟ as per oxford dictionary is the beginning of something . The meaning of commencement as per Collins Dictionary is the beginning or start . The term Comercial as per the dictionary means connected with the buying and selling of goods and services . The word Commencement does not mean completion . It only means beginning of any activity, event, process or a period of time etc. If any activity, event or process is required to be commenced before a particular date then in the ordinary parlance it would mean that such activity, event or process should begin by that particular date. It does not mean that such activity, event or process should be completed by that particular date. The phrase commencement of commercial production use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals with consequential benefits and for dismissal of the appeal by Revenue. 23. The learned AR for Revenue have relied on the impugned order and on the grounds of appeal in the appeal by Revenue. 24. Having considered the rival contentions and upon consideration of the several evidences of commencement of commercial production on or before 31 March, 2010, we hold that the appellant is eligible for exemption for a period of 10 years for its Unit-II with effect from 30 March, 2010. We find that not only commercial production was commenced on 30 March, 2010, the appellant have also made clearances of MDF board on 31 March, 2010, to Raghuraji Agro Industries Pvt. Ltd. Further the stock of MDF boards with appellants brand were found at the premises of the said Raghuraji Agro Industries Pvt. Ltd. during follow-up investigation and drawl of Panchnama on 21 June, 2010. Further samples are also drawn from the stock lying at Raghuraji Agro Industries Pvt. Ltd. and samples of the finished goods and also drawn from the appellant‟s unit and the same were subjected to test by the competent lab and no discrepancy was found. Further the inspecting officers also found semi-finished MD ..... X X X X Extracts X X X X X X X X Extracts X X X X
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