Custom, Excise & Service Tax Tribunal
M/S Indica Industries Pvt. Limited vs Cce &St, Dehradun on 8 November, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. Court No. I Date of Hearing: 17.10.2016 Date of pronouncement: 08.11.2016 Excise Appeal No. 50313 of 2016 (Arising out of order-in-original No. 01/COMMR/DDN/2015 dated 11.01.2016 passed by the Commissioner, Central Excise, Dehradun) M/s Indica Industries Pvt. Limited Appellant Vs. CCE &ST, Dehradun Respondent
Present for the Appellant : Sh. Rajesh Chhibber, Advocate Present for the Respondent : Sh. Yogesh Agarwal, AR Coram: Honble Justice (Dr.) Satish Chandra, President Honble Shri B. Ravichandran, Member (Technical) Final Order No. 54841 / 2016 Per: B. Ravinchandran:
Appellants are having a manufacturing unit (Unit No.III) at Balbhadrapur Industrial Area, Kotdwar. Appellants were already having unit-I in Uttarakhand paying Central Excise duty. Later, they started Unit-II for which area based exemption under Notification No. 50/2003-CE dated 10.06.2003 was claimed and availed. The dispute in the present case is relating to the exemption availed by the appellants in Unit No.III. Stated in brief, the only ground on which the exemption under the said notification was sought to be denied is that they have not filed the declaration as mentioned in Condition No. (ii) of proviso in the said notification which states as under:
(ii) The manufacturer shall, while exercising the option under condition (i), inform in writing to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise giving the following particulars, namely:-
(a) Name and address of the manufacturer;
(b) Location/ locations of factory/ factories;
(c) Description of inputs used in manufacture of specified goods;
(d) Description of the specified goods produced;
(e) Date on which option under this notification has been exercised;
2. The appellants availed the exemption w.e.f. March 2010. A show cause notice 20.12.2015 was issued to the appellant to deny the exemption for the period March, 2010 to October, 2014 and to recover an amount of Rs. 1,75,93,271/- as they have not filed the declaration as above. The original authority confirmed the demand denying the exemption. He also imposed penalty of equivalent amount on the appellant and further penalty of Rs. 5 lakhs on the Managing Director of the appellant.
3. Ld. Counsel for the appellant submitted that they have fulfilled all the basic condition for availing the benefit of notification and it is not justifiable to deny the exemption on the ground that the intimation as above has not been filed in time. It is his case that undisputedly the appellants have fulfilled all the requirements like location of the unit in the area covered by the notification and manufacturing such goods which are within the scope of the said notification and as such there is no legal infirmity in their availing the exemption. He further narrated the background of same goods declared for manufacture in Unit No. II and thereafter decision to create another unit (Unit No.III) for manufacture of automobile components. They have applied for Central Excise registration and the same was granted by the department in March, 2010. The declaration filed on 23.04.2008 from the address of Unit No. II clearly stated that they have intention to manufacture the said automobile components. Later, in 2010 Unit No. III was created. Ld. Counsel submitted that the declaration was filed from Unit No.II because at that time Unit No. III was not fully operational. When Unit No. III became fully operational, they filed a letter dated 15.03.2010 with the Jurisdictional Assistant Commissioner indicated that they are already having a manufacturing unit with Central Excise registration. They have built a new building for different product with a different raw material and manufacturing unit and requested for issue of separate registration number for Unit No. III. All the particulars in Form A under Rule 9 of Central Excise Rules was filed. The letter enclosed various documents like list of plant and machinery, process flow chart, certified copy of first purchase invoice of principal inputs, Documentary evidence to show the date of commencement of commercial production, Certified copy of first clearance of finished goods, Map of factory, Copy of Central Excise registration already issued. The registration under Central Excise was issued by the Jurisdictional Deputy Commissioner on 19.03.2010. Ld. Counsel submitted that they have filed monthly return in Form ER-I returns regularly indicating the Notification No. 50/2003-CE as having been claimed by the appellant. In these circumstances, it is the plea of the appellant that full and adequate intimation has been given to the department about their manufacture and claim of Notification No. 50/2003-CE. As such, denial of exemption on the ground that separate declaration under the said notification has not been filed is not legally sustainable.
4. Ld. AR. reiterated the findings in the impugned order and stated that the intimation given earlier on 28.03.2008 by Unit No. II of the appellant cannot be considered for Unit No.III. He submitted that the condition of the Notification are to be strictly interpreted and as such the appellant are not eligible for exemption.
5. We have heard both the sides and perused the appeal records. We note that the original authority recorded (para 6.12 of impugned order) that it is not the case of the department that the party was located in a non-notified khasra or manufacturing product in the negative list or that they have not commenced the production before the cut of date of 31.03.2010. These are admitted facts. The only reason for denial of the exemption to the appellant is that they have not filed the declaration as stipulated in the notification for availing such exemption. The original authority held that though Notification No. 50/2003-CE did not contain such condition initially the same was inserted vide Notification No. 76/2003-CE dated 05.11.2003. The original authority held that the condition of filing declaration with details is mandatory and in the absence of that the exemption shall not be available.
6. We have perused the condition as reproduced above. The details as required to be filed in the option were all available in the letter dated 15.03.2010 seen in the appeal records. The said letter was in connection with registration of the Unit No. III under Rule 9 of Central Excise Rules, 2002. The registration as sought for has been given by the department on 19.03.2010. However, we note that the appellant indicated in the said Notification No. 76/2008-CE dated 24.03.2008 with reference to already existing unit (Unit -II) apparently no reference to area based exemption No. 50/2003 was made when new registration was sought for Unit No. III. However, the monthly ER-I return which is a statutory return giving various details of excisable goods manufactured and cleared and the exemption availed was filed for Unit No. III for the month of March, 2010 on 10.04.2010. The said return clearly indicated Notification No. 49/2003 and 50/2003 alongwith details like description of goods, quantity manufactured etc. In these factual matrix, we find that the department has been intimated about the existence of the unit, nature of products manufactured and the exemption claimed under Notification No. 50/2003-CE. We find that the same can be considered as adequate compliance of the condition of the notification. We again note that there is no other material ground on which the exemption is sought to be denied. In view of these factual positions, we find no justification in denial of exemption and accordingly set-aside the impugned order and allow the appeal.
(Pronounced on 08.11.2016).
(Justice (Dr.) Satish Chandra)
President
(B. Ravichandran)
Member (Technical)
Pant