Custom, Excise & Service Tax Tribunal
Herbal Concepts Healthcare Pvt. Ltd vs C.C.E., Meerut I on 14 January, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Block No.2, R.K.Puram, New Delhi
COURT-III
Date of hearing: 14/01/2013
Date of pronouncement: 23 / 01 / 2013
Central Excise Appeal No.3192 of 2006
Arising out of the order in appeal No.31-32/Commr./MRT-I/2006 dated 13.6.2006 passed by the Commissioner of Central Excise, Meerut I.
For Approval and Signature:
Honble Mrs. Archana Wadhwa, Judicial Member
Honble Mr. Sahab Singh, Technical Member
1
Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3
Whether their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
Herbal Concepts Healthcare Pvt. Ltd. .. Appellants
Vs.
C.C.E., Meerut I . Respondent
Appearance:
Shri B.L. Narasimhan, Advocate for the appellants Shri I. Baig, A.R. for the Revenue Coram: Honble Mrs. Archana Wadhwa, Judicial Member Honble Mr. Sahab Singh, Technical Member Final Order No.55341/2013 Per Mrs. Archana Wadhwa:
As per facts on record, the appellant set up a new unit in Hardwar for manufacture of hairoil , shampoo and face cream. Vide letter dated 24.9.2004 addressed to Deputy Commissioner, Central Excise the appellant prayed for issuance of registration in terms of Rule 9 of Central Excise Rules, 2002. The said letter disclosed the copy of letter of allotment of industrial plot from SIDCUL, copy of the PAN of the company, copy of certificate of incorporation, list of directors, copy of the PAN of the directors signing the application form, copy of the resolution of the Board of Directors, list of finished products, list of raw materials, ground plan & copy of the memorandum and Article of Association. They were granted registration by the proper officer. The appellant also obtained a drug licence dated 4.12.2004 under Drugs and Cosmetics Act. They commenced their commercial production on 28.12.2004 and started clearance of their final product with effect from 27.1.2005, by claiming the benefit of Notification No.50/2003-CE. The said notification was duly mentioned in the invoices showing clearance of the goods without payment of duty.
2. Subsequently, a formal application exercising option to avail benefit of Notification No.50/2003-CE was filed by the appellant on 27.6.2005. In the said application while giving details of location of the factory, description of inputs, description of final product, the date on which the appellant started availing notification by exercising option was also mentioned as 28.12.2004. Subsequently, the appellant was served with show cause notice on 28.1.2006 proposing to deny the benefit of Notification for the period January 2005 to June 2005 on the ground that proper declaration was filed only on 27.6.2005. Inasmuch as no option was exercised by the appellant to avail benefit of said Notification prior to 27.6.2005, when formal application exercising option was filed, notice proposed to deny benefit of the Notification to the extent of Rs.36,99,414/- and education cess of Rs.73,989/-. A second show cause notice was issued on 21.3.2006 proposing confirmation of demand of duty of Rs.1,10,15,686/- and education cess of Rs.2,20,313/- on the same ground. Two show cause notices stand adjudicated by the lower authorities confirming demand along with interest and imposing penalties. The reason for denial of the benefit of Notification is that in terms of said Notification option is required to be exercised in writing before first clearance and inasmuch as the appellant did not file such declaration, the benefit cannot be extended to them.
3. After hearing both sides, we find that Notification No.50/2003-CE dated 10.6.2003 is an area based exemption notification subject to fulfillment of certain condition. Substantive conditions of notification, as contained in para 2 of the Notification would be applicable to the new units which commenced their commercial production on or before 7.1.2002 and the unit existing before 7.1.2005 if undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after 7.1.2003. The exemption shall apply for a period not exceeding 10 years from the date of publication or from the date of commencement of commercial production whichever is later. The said notification was amended by a Notification No.76/2003-CE dated 5.11.2003 to insert a proviso to the first para of the notification which reads as under:
Provided that the exemption contained in this notification shall apply subject to the following conditions, namely :-
(i)` The manufacturer who intends to avail of the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year;
(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;
(iii) The manufacturer may, for the current financial year, submit his option in writing on or before the 30th day of November, 2003..
4. As is clear from the above proviso a manufacturer who intends to avail exemption will exercise an option in writing before clearance of the goods and such option is required to contain the name and address of the manufacturer, location of factory, description of inputs used in manufacture of specified goods, description of the specified goods produced; date on which option is exercised.
5. The Revenues objection to the extension of benefit of the said notification is that such option stands exercised by the appellant for the first time vide their letter dated 27.6.2002. Inasmuch as the same would be applicable only from said date, the clearances effected by the appellant prior to the said date stands denied exemption with the consequent confirmation of demand. The appellants contention on the other hand is that option to exercise in terms of the said notification required the assessee to give various particulars mentioned therein, which already stand given by them while applying for registration on 24.9.2004. As such the entire information was available with the Revenue. Further it stands contended that the fact of availment of said notification was duly mentioned in the invoices issued by them and it can be reasonably concluded that the appellant opted for availment of said Notification.
6. We find that it is not disputed that the appellant factory is located in Khasra No.11 of village Ranipur, Pargana, Jawalapur, Tehsil & Distt Hardwar, which is covered by the notification in question. Further the appellants final product hair oil , shampoo and face cream are also specified items in the notification for the purpose of exemption. As such it can be safely concluded that appellants are otherwise entitled to the benefit of the exemption, which also does not stand denied to them for the period subsequent to June 2005.
7. Now, the question requires to be decided is as to whether the appellants non-filing of option prior to 27.6.2005 can be fatal to their claim of exemption especially when all the particulars stand disclosed by them in the registration application. As is seen from the above notification the fact requires to be disclosed are the name and address of the factory, details of the input as also the details of the final product. The same very details already stand given by the appellant in their application dated 24.9.2004. Inasmuch as the entire idea of filing option letter is put to Revenue on notice about existence in the specified area of the unit and the availability of the notification to the unit in respect of the final product manufactured by them, we are of the view that initial letter filed on 24.9.2004 serves the same purpose.
8. The Honble Supreme Court in the case of C.C. (Imports) vs. Tullow India Operations Ltd. 2005 (189) ELT 401 (SC) has observed that once the assessee satisfies eligibility clause of the notification, exemption clause has to be construed liberally. It stands further observed by their Lordship that eligibility criteria deserves a strict construction and construction of a condition thereof may be given a liberal meaning. The exemption notification should not be construed in a way which would prove to be oppressive in nature. While applying the above observation of the Honble Supreme Court to the facts of the present case, we note that there is no denial of the eligibility of notification to the appellant who satisfies all the substantive condition. The benefit sought to be denied is on the sole ground of late filing of option. We have already held even the procedural condition said is covered by the first letter of the appellant while applying for registration.
9. We at this stage also note that various precedent identically worded notifications, as regards the procedural condition is concerned, have been the subject matter of the Tribunal decision. In the case of Bombay Processors vs. C.C.E., Mumbai 2005 (184) ELT 371 (Tri.-Mum.), delay of 3 years in filing the option to avail benefit of SSI Notification No.8/99 was held as not fatal to the assessees claim of the exemption. In the case of Keshari Wire Products (P) Ltd. vs. C.C.E., Patna 2003 (16) ELT 180 (Tr-Kol.), it was held that requirement of filing intimation to Revenue of assessees intention to avail benefit of notification being only a procedural requirement and delay of filing such intimation will not result in denial of substantive benefit of exemption. It was held that fact of filing of declaration through Rule 173B was sufficient and late filing of the option in terms of condition of notification was also procedural requirement, the contravention of which will not result in denial of benefit of notification. Similarly, in the case of Super Plateck Pvt. Ltd. vs. C.C.E., Chandigarh II 2005 (186) ELT 561 (Tri.-Del.), the benefit of the notification No.9/2000-CE was extended to the appellant even though formal declaration indicating option to avail was late filed by the appellant. To the same effect is the Tribunal decision in the case of C.C.E., Mumbai vs. AGS Inds. 2005 (181) ELT 126 (Tri-Mum.). Similarly in the case of Allied Bitumen Complex (India) Pvt. Ltd. vs. C.C.E., Calcutta III 2002 (141) ELT 373 and in the case of C.C.E., Rajkot vs. Narmada Forge Pvt. Ltd. 2006 (197) ELT 496 (Tri-Mum.), it was held that classification list claiming benefit of the notification when filed, separate intimation letter exercising option to avail notification was not essential and non-filing of the same was only a procedural lapse.
10. In the light of the declaration of law in the above referred decisions, we note that the assesseee is required to file option giving details , which already stand given by them in the first letter. Further, while issuing invoices, the appellant was claiming the benefit of notification in question. As such, there was enough intimation to the Revenue about availment of the benefit of the Notification in question. Merely because formal letter was filed subsequently, the same cannot be a ground for denial of the benefit prior to the said date in the absence of dispute about availability of the benefit of the Notification. As such, we find no merits in the impugned order and accordingly, set aside the same and allow the appeal with consequential relief to the appellant.
(Pronounced in open Court on 23 / 01 /2013.
(Archana Wadhwa) Judicial Member (Sahab Singh) Technical Member scd/ 1