Consistently accepted area-based exemption cannot be denied later for missing stale declaration after years of departmental acquiescence.

An exemption under Notification No. 50/2003-C.E. could not be denied merely because an old installation declaration was not produced after many years, where the assessee had been continuously granted the area-based exemption and the department had accepted it year after year without objection. The tax authority could not rely on its own omission or inaction to withdraw the benefit on a stale procedural ground. The demand was therefore held unsustainable, the duty-confirming order was set aside, and the appeal was allowed.

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Issues: Whether the demand could be sustained for non-production of an old declaration where the assessee had been continuously granted area-based exemption year to year.

Analysis: The exemption under Notification No. 50/2003-C.E. had been claimed by the assessee for several years and the department had allowed it without objection. In these circumstances, requiring production of a declaration said to be filed at the time of installation, after a long lapse of time, was unjustified. The department could not rely on its own omission or inaction to deny the exemption when the benefit had been continuously granted and accepted.

Conclusion: The demand was not sustainable and the assessee succeeded.

Final Conclusion: The order confirming duty was set aside and the appeal was allowed.

Ratio Decidendi: A tax authority cannot deny a consistently granted exemption by insisting on stale procedural documents after years of acceptance, particularly where the department's own inaction or mistake led to the continued allowance of the benefit.

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