Non-manufacture allegations fail where records show actual manufacturing activity and no corroborative evidence disproves exemption eligibility.

A demand treating the assessee as a non-manufacturer and denying area-based exemption and refund was held unsustainable where the record showed periodic excise checks, industrial and pollution permissions, and inward and outward movement of goods. The Tribunal relied on earlier identical decisions and held that allegations based only on investigations in another Commissionerate, without concrete enquiry at the assessee's premises or corroborative evidence, could not displace material showing actual manufacture and functioning of the units. On that basis, the exemption and refund benefit was sustained and the adverse order was set aside.

---

---

Issues: Whether the demand of duty by treating the appellant as a non-manufacturer and denying the area based exemption and refund under Notification No. 56/2002-CE dated 14.11.2002 was sustainable.

Analysis: The Tribunal found that the record showed periodic checks by jurisdictional excise officers, permissions from the Directorate of Industries and the Pollution Control Board, and movement of goods inward and outward. It also relied on earlier Tribunal decisions on identical facts holding that allegations based only on investigation at the end of another Commissionerate, without any concrete investigation at the appellant's end and without corroborative evidence, could not establish that the units were not manufacturing. The Tribunal noted that the Revenue's case rested on assumption and presumption and that the material on record supported actual manufacture and functioning of the units.

Conclusion: The demand on the allegation that the appellant was not a manufacturer was held unsustainable, and the appellant was held entitled to the exemption and refund benefit.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: A demand alleging non-manufacture cannot be sustained merely on investigative assumptions from another jurisdiction when the record contains corroborative evidence of manufacture and functioning and no concrete contrary evidence is brought against the assessee.

---