Area-based exemption requires credible proof of pre-cut-off production; repeated hearing notices satisfy natural justice.

Area-based exemption under Notification No. 50/2003-CE required credible proof that a new unit in Uttarakhand had installed machinery and begun commercial production before 31.03.2010. The documentary record was found unreliable: supplier and transporter could not be traced, the goods were not shown to have passed through the relevant check post, and the chartered engineer denied issuing the certificate. On that basis, the exemption claim failed and the duty demand was upheld. The allegation of denial of personal hearing also failed because multiple hearing opportunities were granted and the appellant did not participate, so the adjudication was not vitiated for breach of natural justice.

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Issues: (i) Whether the appellant was entitled to area based exemption under Notification No. 50/2003-CE; (ii) whether denial of personal hearing vitiated the adjudication.

Issue (i): Whether the appellant was entitled to area based exemption under Notification No. 50/2003-CE.

Analysis: The exemption was available to new units in Uttarakhand that commenced commercial production before the cut-off date of 31.03.2010. The documentary evidence relied upon by the appellant, including the machinery purchase bills, transport documents, bank payment records and the chartered engineer's certificate, was found unreliable in view of the departmental verification. The supplier and transporter were not found at the stated addresses, the goods were not shown to have passed through the relevant check post, and the chartered engineer denied issuing the certificate. The record therefore did not establish installation of machinery or commencement of commercial production before the cut-off date.

Conclusion: The appellant was not entitled to the benefit of Notification No. 50/2003-CE, and the duty demand was justified.

Issue (ii): Whether denial of personal hearing vitiated the adjudication.

Analysis: The record showed that opportunities of personal hearing were granted on multiple dates and the show cause notice was served. The appellant did not avail the opportunity despite repeated notices. In these circumstances, the adjudication could not be treated as being in breach of natural justice.

Conclusion: The plea of violation of natural justice was rejected.

Final Conclusion: The impugned order was sustained in full and the appeal failed.

Ratio Decidendi: A claim to area based exemption must be supported by credible evidence of installation of machinery and commencement of commercial production before the prescribed cut-off date, and repeated opportunities of hearing satisfy natural justice when the party chooses not to participate.

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