2018 (5) TMI 10 - AT - Central Excise

Tribunal overturns duty demand, citing principle against benefiting from errors.

The Tribunal set aside the duty demand, allowing the appellant's appeal. The Department's sudden request for missing documents after years of exempting ... Area Based Exemption - N/N. 50/2003-C.E., dated 10-6-2003 - Department opined that the declaration was supposed to be submitted at the time of installation of the factory to claim area based exemption. The same was not produced by the appellant - Held that: - Since 2005, the appellant is filing regular return to claim area based exemption as per N/N. 50/2003. The Department never raised any objection and allowed the claim. But suddenly, in the year 2012, the department demanded the documents which was supposed to be given at the time of installation of the factory - If the department has continuously allowed the area based exemption presumably the said formalities were completed. For its own fault, the Department cannot take the advantage. After a gap of so many years, the certificate cannot be demanded by the Department when the department has continuously allowed the area based exemption year to year basis - appeal allowed - decided in favor of appellant. Issues:Claim of area-based exemption for Central Excise duty based on missing declaration at the time of factory installation.Analysis:The case involved an appeal against an order dated 19-12-2013 regarding the period of dispute from October 2007 to 13-8-2012. The appellant, engaged in manufacturing disposable syringes and needles, was based in Haridwar and enjoyed area-based exemption under Notification No. 50/2003-C.E. The appellant got proper registration on 11-6-2007. The department contended that a declaration was required at the time of factory installation to claim the exemption, which the appellant failed to produce, leading to a demand for duty.Upon hearing both sides, it was noted that the appellant had been regularly filing returns since 2005 to claim the exemption without any objection from the Department. However, in 2012, the Department suddenly demanded the missing documents related to factory installation. The appellant argued that the required declaration was not available anymore, and the Department should have checked its records since it had continuously allowed the exemption. Referring to the principle that one cannot benefit from their own mistakes, citing the case of Mrityunjay Rani v. Narmada Bala Sehgal, AIR 1961 SC 1353, it was concluded that the Department cannot take advantage of its own possible oversight.The Tribunal found no merit in the Department's demand for the certificate after several years of allowing the exemption without issue. Therefore, the order demanding duty was set aside, and the appeal filed by the appellant was allowed.