Commercial production test governs area-based exemption eligibility; absence of sales before the cut-off did not defeat relief.

An area-based exemption under Notification No. 50/2003-CE turns on whether commercial production actually commenced by the specified cut-off date. The governing test is the start of commercial production, not the existence of fully saleable finished goods or completed sales before that date. On the facts discussed, the State certificate recorded commencement of commercial production on 31.3.2010, and supporting material from the original authority corroborated that finding. Objections relating to incomplete plant installation, power supply, raw material, and alleged manipulation were not sufficient to displace the record. The absence of commercial sales before 31.3.2010 did not negate eligibility for the exemption.

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Issues: Whether the respondent had commenced commercial production on or before 31.3.2010 so as to qualify for exemption under Notification No. 50/2003-CE dated 10.6.03.

Analysis: The notification was linked to the industrial policy and the governing test was the date of commencement of commercial production, not the existence of fully saleable finished goods or completed sales by the cut-off date. The State authorities had certified commencement of commercial production as 31.3.2010, and the respondent had also been extended similar benefit under other fiscal regimes on the same factual basis. The Revenue's objections regarding incomplete plant installation, power supply, raw material, and alleged manipulation were considered, but the record contained direct and corroborative material relied upon by the original authority. The absence of commercial sales before 31.3.2010 did not displace the finding that commercial production had begun by that date.

Conclusion: The respondent was eligible for the exemption, and the Revenue failed to establish any ground for interference.

Ratio Decidendi: For an area-based exemption tied to commencement of commercial production, the decisive requirement is actual commencement of commercial production by the cut-off date, and not prior sale of fully marketable finished goods.

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