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of <h1>Tribunal allows exemption for separate factory units manufacturing Motor Vehicle Parts</h1> <h3>M/s Victoria Automotive Inc., Shri Baljeet Singh Rawat, Shri H.S. Banga, Shri Naveen Kumar Maheshwari And Shri Daleep Suneja Versus CCE, Dehradun</h3> M/s Victoria Automotive Inc., Shri Baljeet Singh Rawat, Shri H.S. Banga, Shri Naveen Kumar Maheshwari And Shri Daleep Suneja Versus CCE, Dehradun - TMI Issues:- Denial of area-based exemption under Notification No.50/2003 to the assessee-Appellants for the period January 2010 to December 2010.Analysis:The appeals were filed against the Order-in-Original denying area-based exemption to the assessee-Appellants who were engaged in manufacturing Motor Vehicle Parts under Chapter 87 of the Central Excise Tariff Act, 1985. The dispute revolved around the existence of two separate units, Unit-I and Unit-II, within the same premises. The Tribunal referred to a previous case involving the appellants and emphasized the distinction between a factory and industrial units for the application of the exemption under Notification No.50/2003. The Tribunal highlighted that each section or part of a factory manufacturing a different commodity should be treated as a separate manufacturing unit eligible for exemption, as the duty exemption is unit-wise and not factory-wise. The Tribunal also cited clarifications from the CBEC regarding the application of the notification to new assembly lines within existing factories.The Tribunal further discussed the interpretation of the term 'industrial unit' in the context of the notification and referenced legal precedents to support the view that different terms like 'unit' and 'factory' cannot be equated for the purpose of the exemption notification. It was clarified that the exemption is granted to new or substantially expanded industrial units, not with reference to a factory as a whole. The decision highlighted that the definition of 'factory' under the Central Excise Act is broader and cannot be applied to units involved in the manufacture of specified goods. The Tribunal concluded that the impugned order denying the exemption was not legally sustainable and set it aside, allowing the appeals filed by the assessee-Appellants. The judgment reiterated the principle that different sections of a factory producing distinct items should be considered as separate units eligible for exemption, emphasizing the unit-wise nature of the exemption under Notification No.50/2003.
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