2010 (9) TMI 564 - AT - Central Excise

Denial of Exemption Upheld, SSI Claim Remanded for Re-examination. Fair Opportunity Emphasized.

The Tribunal upheld the denial of exemption under Notification No. 50/2003 due to the relocation of the appellant's factory. However, it disagreed with ... Area based exemption - The exemption under Notification No. 50/2003 is available to the assessee for a specific location of their factory in that area - The assessee shift their factory from that location - So, here the Commissioner (Appeals) is right, who has rightly denied the exemption under Notification No. 50/2003-C.E. SSI Exemption - Contention of the appellant that they are covered under SSI exemption although they failed to refer this claim before the Adjudicating Authority, but they have raised their claim of SSI exemption before the Commissioner (Appeals) and who denied their claim of SSI exemption only on the ground that these claims were not raised before the Adjudicating Authority - This view of the Commissioner (Appeals) is not acceptable - The matter needs re-examination and verification by the Original Adjudicating Authority whether the appellants are entitled for SSI exemption or not after giving reasonable opportunity to the appellants - The appeal is disposed of. Issues:Challenge to denial of exemption under Notification No. 50/03-C.E. and SSI Exemption.Analysis:The appellant contested the denial of exemption under Notification No. 50/03-C.E. and SSI Exemption. The facts revealed that the appellant's unit was initially located at a specific address and availed area-based exemption under Notification No. 50/2003. Subsequently, the unit was shifted to a new location, leading to the denial of exemption for the period post-relocation. The appellant argued that since they shifted within the same area, they should still be eligible for the exemption. Additionally, they claimed entitlement to SSI exemption based on their total clearances falling within the prescribed limit. The appellant's consultant emphasized that even if the area-based exemption was not applicable, they should be granted SSI exemption. On the other hand, the Departmental Representative supported the impugned order and contended that the SSI exemption claim was an afterthought as it was not raised before the Adjudicating Authority.Upon hearing both parties, the Tribunal acknowledged that the exemption under Notification No. 50/2003 was location-specific, and relocating the factory invalidated the entitlement to the said exemption. However, regarding the SSI exemption claim, the Tribunal disagreed with the Commissioner (Appeals) and opined that the matter required re-examination. The Tribunal noted that although the SSI exemption claim was not initially raised before the Adjudicating Authority, it was presented before the Commissioner (Appeals), who rejected it solely due to the failure to raise it earlier. Consequently, the Tribunal remanded the case to the Original Adjudicating Authority for thorough verification and examination of the appellant's eligibility for SSI exemption. The Tribunal directed the Authority to provide a fair opportunity to the appellants to present their case and make a decision based on the findings. Ultimately, the Tribunal disposed of the appeal with these directives, setting aside the denial of exemption under the SSI unit for further scrutiny and determination.