2018 (1) TMI 1689 - AT - Central Excise

Tribunal Decision: Appeal Allowed for Exemption Verification

The Tribunal allowed the appeal, remanding the matter for verification by the adjudicating authority to determine if the purchased gold and silver unit ... Benefit of area based exemption - gold and silver unit (purchased by respondent) - N/N. 50/2003 dated 10.6.2003 - Departmental view is that area based exemption was never granted to the respondent and was never availed by the respondent. On the other hand, the respondent claim that it was availed and production was continued - HELD THAT:- It appears that the existing unit who is availing the area based exemption is entitled to add the new plant for the production of new products - In the instant case, the new product is the gold and silver bar. So, it is according to law - Further, the Board’s Circular No. 960/03/2012 dated 17.2.2012, is stating that the change of ownership or change of the factory premises does not de bar the unit to avail the area based exemption, that will continue. The change of the ownership and change of the plot does not matter. The core issue is whether the gold unit which was purchased by the respondent was availing the area based exemption or not. Only for this limited purpose, the matter is remanded to the adjudicating authority to verify the same and decide the issue, by providing the reasonable opportunity to the appellant. The appeal is allowed by way of remand. Issues:1. Appeal against Order-in-Original denying area-based exemption to a purchased unit for gold and silver.2. Interpretation of Circulars regarding addition/modification of plant or machinery for new products.3. Effect of change of ownership and factory premises on area-based exemption.4. Dispute over whether area-based exemption was availed for the purchased gold and silver unit.5. Remand to adjudicating authority for verification and decision on area-based exemption.The judgment involves an appeal against the Order-in-Original denying area-based exemption to a purchased unit for gold and silver. The appellant, engaged in manufacturing auto parts, established a new unit for gold and silver in addition to the existing auto parts unit. The appellant purchased the gold and silver unit from the existing unit and claimed area-based exemption, which was denied by the department but allowed by the Commissioner (Appeals). The Tribunal considered Circulars stating that the addition of new products is allowed during the exemption period and that change of ownership or factory premises does not affect the exemption. The core issue was whether the purchased gold unit availed the area-based exemption. The Tribunal remanded the matter to the adjudicating authority for verification, emphasizing providing a reasonable opportunity to the appellant and admitting additional evidence if necessary.The Tribunal referred to Circulars to support its decision, highlighting that the addition of new products by an eligible unit is permissible during the exemption period. The Circulars clarified that changes in ownership or factory premises do not impact the unit's eligibility for area-based exemption. The Tribunal emphasized that the key issue was whether the purchased gold and silver unit had availed the area-based exemption. The Tribunal directed the adjudicating authority to verify this aspect and make a decision based on the evidence presented, ensuring a fair opportunity for the appellant to substantiate their claim.The dispute revolved around whether the area-based exemption was granted and availed for the purchased gold and silver unit. The department contended that the exemption was never granted or availed by the respondent, while the respondent asserted that it was indeed availed, and production continued. The Tribunal considered the facts and circumstances of the case, focusing on the specific issue of whether the purchased unit had the benefit of the area-based exemption. The Tribunal set aside the impugned order and allowed the appeal by remanding the matter for further examination by the adjudicating authority.In conclusion, the Tribunal's judgment addressed the complexities surrounding the denial of area-based exemption to the purchased gold and silver unit. By emphasizing the need for a thorough verification process and fair consideration of evidence, the Tribunal ensured a just outcome in line with the legal principles and Circulars governing the eligibility for such exemptions. The remand to the adjudicating authority signifies a commitment to a detailed review of the facts to determine the rightful application of the area-based exemption in this case.