Exemption continuity on change of ownership upheld where commercial production began before the cut-off date and compliance was intimated.

Exemption under Notification No. 50/2003-CE remained available where the unit's records showed capital goods purchases, wages, power and fuel es, and clearances during the relevant period, supporting commencement of commercial production before the cut-off date. A later change in ownership did not by itself defeat the remaining exemption period because the transfer had been duly intimated and the applicable circular preserved the benefit where prescribed option and intimation requirements were met. In the absence of any adverse verification report, denial of exemption was not sustainable, and the successor retained the benefit.

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Issues: Whether the exemption under Notification No. 50/2003-CE dated 10.06.2003 could be denied on the ground that the unit had not commenced commercial production before the cut-off date and that change in ownership disentitled the successor to continue the exemption.

Analysis: The evidence on record showed that the unit had brought in capital goods, reflected purchases, incurred wages and power-fuel expenditure, and effected clearances during the relevant period, which supported the finding that commercial production had commenced before the cut-off date. The subsequent change in ownership was duly intimated, and the applicable departmental circular provided that such change would not by itself jeopardize the remaining exemption period if the prescribed option and intimation requirements were followed. The record also did not disclose any adverse verification report to rebut the assessee's claim. The denial of exemption was therefore not sustainable.

Conclusion: The exemption was rightly held to be available to the assessee, and the Revenue's challenge failed.

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