2007 (8) TMI 134 - AT - Central Excise

Tribunal rules Revenue failed to prove un-exempted processes by appellant under Notifications 253/82, 297/79. Burden of proof on Revenue.

The Tribunal upheld the decisions of the lower authorities, emphasizing that the Revenue failed to prove any un-exempted processes by the appellant, as ... Exemption – Revenue contended that assessee were carrying on unspecified process which are not exempted but no evidence presented in support of his contention – Held that mere assumption and presumption the benefit of notification can’t be denied Issues:Grant of benefit of Notification Nos. 253/82 and 297/79 - Burden of proof on Revenue to show un-exempted processes.Analysis:The appeal before the Appellate Tribunal arose from Order-in-Appeal No. 34/2005, where the Commissioner (A) accepted the finding in favor of the assessee regarding the grant of benefit under Notification Nos. 253/82 and 297/79. Both notifications provided exemptions to specific fabrics subjected to listed processes. The authorities confirmed that the appellant was engaged solely in exempted activities and not in any un-exempted processes. However, the Revenue contended that the assessee needed to prove the absence of un-exempted activities. The Commissioner (A) highlighted that the burden lies on the Revenue to demonstrate any un-exempted processes being carried out by the assessee to deny the benefit of the notifications.During the hearing, the learned counsel for the appellant emphasized that the show cause notice did not accuse the assessee of conducting unspecified, un-exempted processes. The authorities had verified all registers and confirmed the appellant's compliance with exempted activities. The Revenue failed to substantiate their claims and did not provide any evidence or statements to support their allegations of un-exempted activities. The absence of specific allegations in the show cause notice further weakened the Revenue's case.After careful consideration, the Tribunal concurred with the findings of fact by both authorities that the appellant was not involved in any un-exempted activities. The Tribunal reiterated that the burden of proof regarding un-exempted processes rested with the Revenue. Since no evidence was presented by the Revenue, and the case relied on mere assumptions and presumptions, the benefit of the notifications could not be denied. Consequently, the Tribunal upheld the decisions of the lower authorities, emphasizing that the Revenue had failed to discharge its burden of proof. The appeal was deemed meritless and rejected by the Tribunal. The judgment was pronounced and dictated in open court.