Contemporaneous evidence of pre-cut-off commercial production supports area based exemption under Notification No. 50/2003-C.E.

Contemporaneous evidence of commencement of commercial production before the prescribed cut-off date entitled the assessee to area based exemption under Notification No. 50/2003-C.E. The record included a boiler certificate obtained under the Indian Boilers Act, VAT return evidence showing tax payment and acknowledgment for the relevant period, and a District Industries Centre certificate recording commencement of production on 30-3-2010. On the totality of this material, production was held to have begun before 31-3-2010, so the exemption was available and the impugned orders were set aside.

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Issues: Whether the assessee had commenced commercial production on or before the cut-off date so as to qualify for area based exemption under Notification No. 50/2003-C.E., dated 10-6-2003.

Analysis: The decisive evidence showed that the boiler certificate had been obtained under Section 7 of the Indian Boilers Act, and that such certification under Section 9 was issued only when the boiler was ready for use. The VAT return for the relevant period was filed and acknowledged, tax had been paid, and the District Industries Centre certificate recorded the initial date of commencement of production as 30-3-2010. On the totality of this material, the record supported the assessee's claim that production had begun before 31-3-2010.

Conclusion: The assessee was entitled to the benefit of Notification No. 50/2003-C.E., dated 10-6-2003.

Final Conclusion: The impugned orders were set aside, the assessee's appeals were allowed, and the department's cross appeal was dismissed.

Ratio Decidendi: Where reliable contemporaneous evidence establishes commencement of commercial production before the prescribed cut-off date, the assessee is entitled to the area based exemption claimed under the notification.

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