2013 (1) TMI 440 - AT - Central Excise

Tribunal Upholds Exemption for Manufacturing Units Despite Minor Discrepancies

The Tribunal upheld the exemption under Notification No. 56/2002-C.E. for manufacturing units located in specified industrial areas despite minor ... Refund of the duty paid through PLA - Respondents are the manufacturers located in the State of J & K - Exemption Notification No. 56/2002-C.E – Exemption denied on the ground that unit is not located in the Khasra number specified against those industrial areas in the notification – Held that:- The exemption under this notification is available in respect of the eligible goods cleared by the units located in the industrial areas, growth centres etc. specified in this notification and it is not the condition of the Notification that the unit must also be located in the Khasra numbers mentioned against the each industrial area. In favour of assessee Issues Involved:1. Eligibility for exemption under Notification No. 56/2002-C.E.2. Interpretation of Khasra numbers in relation to specified industrial areas.3. Validity of refund claims based on the location of manufacturing units.Issue-wise Detailed Analysis:1. Eligibility for exemption under Notification No. 56/2002-C.E.:The core issue revolves around the eligibility of manufacturing units located in Jammu & Kashmir for exemption under Notification No. 56/2002-C.E. The respondents claimed that their units were situated in areas specified in Annexure-II of the notification. The exemption is applicable to goods manufactured and cleared by units in specified industrial areas, growth centers, etc. The department contested that the units, although located in specified industrial areas, were not situated in the Khasra numbers mentioned in the notification, thus disqualifying them from the exemption.2. Interpretation of Khasra numbers in relation to specified industrial areas:The department argued that the Khasra numbers of the units must match those specified against the industrial areas in Annexure-II to the notification. The respondents countered that the exemption should not be denied based on minor discrepancies in Khasra numbers, especially when the units were undoubtedly located within the specified industrial areas. The Tribunal found that the Khasra numbers mentioned in the notification might contain typographical errors and should be interpreted in a manner that does not unjustly deny the exemption.3. Validity of refund claims based on the location of manufacturing units:The respondents had applied for and received refunds of duty paid through PLA, which were later contested by the department. The Commissioner (Appeals) upheld the refunds, asserting that the units were eligible for the exemption. The Tribunal examined the location certificates issued by Naib Tehsildar and found that the units were indeed situated in the specified industrial areas, despite discrepancies in Khasra numbers. The Tribunal concluded that the benefit of the exemption should not be denied due to these discrepancies, thereby validating the refund claims.Separate Judgments:Appeal No. E/1944-1947/2009:The Tribunal found that the unit of M/s. Cardinal Chemicals Pvt. Ltd. was located in the SICOP industrial area, with Khasra numbers matching those specified in the notification, albeit with a minor typographical error. The exemption was upheld.Appeal No. 1942-1943/2009:For M/s. Natural Herbal Products, the Tribunal noted that the unit was located in the SICOP Industrial Estate, and the Khasra number discrepancy was due to a mistake in the notification. The benefit of the exemption was upheld.Appeal No. E/1938 and 1941/2009:Regarding M/s. B.R. Agro Tech, the Tribunal found that the unit was located in the SIDCO Industrial Estate, and the Khasra numbers were incorrectly mentioned in the notification. The exemption was upheld.Appeal No. E/1939/2009:For M/s. Chenab Agrochem Ltd., the Tribunal noted that the unit was in the SICOP Industrial Estate, and the Khasra numbers were mistakenly listed under SIDCO Industrial Estate. The exemption was upheld.Appeal No. E/1940/2009:For M/s. Bharat Udyog, the Tribunal found that the unit was in the SICOP Industrial Estate, and the Khasra number discrepancy was due to a mistake in the notification. The exemption was upheld.Conclusion:The Tribunal dismissed the Revenue's appeals, affirming that the exemption under Notification No. 56/2002-C.E. should not be denied based on minor discrepancies in Khasra numbers, provided the units were located in the specified industrial areas. The refund claims were validated, and the stay applications were also dismissed.