2018 (12) TMI 1100 - AT - Central Excise

Interpreting exemption notification for manufacturing activities involving brake shoes and batteries

Commissioner of Customs & Central Excise Meerut-II Versus M/s Escorts Limited

The case focused on interpreting an exemption notification for manufacturing activities, specifically regarding brake shoes and batteries. The appellant ... Area Based Exemption - N/N. 50/2003-CE dated 10.06.2003 - appellant purchased brake shoes and batteries in finished condition from the manufacturers and was clearing them from their factory after doing fresh packing - Held that:- Revenue has not rebutted the fact that the said machines were purchased by the assessee under the cover of invoices mentioned in the order of Commissioner (Appeals). There is no evidence produced by the Revenue rebutting above finding of fact - appeal dismissed - decided against Revenue. Issues:1. Interpretation of Exemption Notification No.50/2003-CE dated 10.06.2003.2. Determination of manufacturing activities qualifying for exemption.3. Assessment of evidence regarding the grinding process of brake shoes.4. Validity of the findings of the Appellate Authority.Analysis:1. The primary issue in this case revolves around the interpretation of Exemption Notification No.50/2003-CE dated 10.06.2003, as amended by Notification No.01/2008-CE dated 18.01.2008. The appellant, engaged in manufacturing railway and auto parts, sought exemption under this notification for brake shoes and batteries. The notification specified processes that would disqualify goods from exemption, leading to the appellant initially paying duty but later claiming exemption.2. The second issue concerns the determination of manufacturing activities that qualify for the exemption. The appellant claimed to have started the grinding process of brake shoes, which was considered a manufacturing activity entitling them to exemption. The Central Excise Officers visited the factory and found grinding machines but no operation ongoing. The appellant provided evidence of procuring grinding fixtures and machines, challenging the Revenue's claim that grinding started after a specific date.3. Assessing the evidence regarding the grinding process was crucial in this case. The Appellate Authority considered the documentary evidence provided by the appellant, including invoices for the purchase of grinding machines and fixtures. The Revenue's argument that grinding fixtures were received after a certain date was countered by the appellant's evidence, and the absence of evidence from the Revenue to rebut the appellant's claims strengthened the case for exemption.4. Finally, the validity of the findings of the Appellate Authority was a crucial aspect of the judgment. The Appellate Tribunal analyzed the factual findings recorded by the Authority, highlighting the appellant's procurement of machines and fixtures as per documented invoices. The Tribunal noted the absence of evidence from the Revenue to challenge these findings, leading to the rejection of the Revenue's appeal and upholding the decision in favor of the appellant.In conclusion, the judgment centered on interpreting the exemption notification, determining qualifying manufacturing activities, assessing evidence of the grinding process, and validating the findings of the Appellate Authority, ultimately resulting in the rejection of the Revenue's appeal.