2022 (8) TMI 983 - AT - Central Excise

Tribunal upholds exemption for gold & silver unit acquisition, rejecting Revenue's appeal

Commissioner, Central Goods & Service Tax, CX Commissionerate, Dehradun Versus M/s Paraj Exim

The tribunal ruled in favor of the respondent in a case concerning the eligibility of exemption Notification No. 50/2003-CE. The appeal by the Revenue was ... Area Based Exemption - whether the gold and silver unit which was purchased by the respondent/assessee was availing the area based exemption or not? - HELD THAT:- The tribunal in CCE & ST, DEHRADUN VERSUS M/S. PARAJ EXIM [2018 (1) TMI 1689 - CESTAT DELHI], observed that “the whole issue is whether the gold unit which was purchased by the respondent was availing the area based exemption or not” and remanded the matter to the adjudicating authority for this limited purpose. It is clear from paragraph 4 of the final order that the tribunal was aware that the respondent had purchased only the silver and gold unit from OSMI on 15 October 2015 and it is evident from paragraph 3 that this tribunal was aware that this unit was established by OSMI in October 2015 and due intimation was given to the Department. The submission of the learned Authorized Representative is agreed upon that the tribunal had an incorrect impression that the entire unit of OSMI was transferred to the respondent and accordingly passed the final order. The final order passed by this tribunal attained finality and the matter was remanded for the limited purpose of verification of the fact as to whether the gold unit was availing the benefit of area based exemption notification or not. Appeal dismissed - decided against Revenue. Issues:Eligibility of exemption Notification No. 50/2003-CE to the respondent.Analysis:The appeal was filed by the Revenue challenging the order-in-appeal dated 20.02.2019 passed by the Commissioner, Central Goods & Service Tax (Appeals), Dehradun, where the Department's appeal was rejected. Despite repeated notices, no one appeared on behalf of the respondent. The issue revolved around the eligibility of exemption Notification No. 50/2003-CE to the respondent.The facts of the case revealed that M/s Om Sai Motor Industries was involved in manufacturing auto parts and availing the benefit of exemption Notification No. 50/2003-CE. In October 2015, they established a unit for gold and silver bars in addition to their auto parts units, which was later sold to the respondent. The tribunal's final order highlighted the situation where the appellant purchased the silver and gold unit from M/s OSMI and claimed the area-based exemption, which was initially denied by the department but allowed by the Commissioner (Appeals).During the proceedings, it was emphasized that the existing unit availing the area-based exemption could add new plants for producing new products, as per relevant circulars. The core issue was whether the gold unit purchased by the respondent was availing the area-based exemption. The tribunal ruled in favor of the respondent and remanded the matter for verification by the original authority.Subsequently, the Assistant Commissioner verified the matter and confirmed that the gold and silver unit was availing the exemption before being transferred to the respondent. The Revenue, however, contended that the respondent was not entitled to the exemption as they only acquired the gold and silver division, not the entire unit of OSMI. The tribunal upheld the impugned order, emphasizing that the verification was limited to whether the gold unit was availing the exemption, which was confirmed by the factual report.In conclusion, the tribunal found no merit in the Revenue's appeal, upholding the impugned order. The final order passed by the tribunal was deemed correct, as it was clear that the respondent had purchased only the silver and gold unit, and the verification confirmed the unit's eligibility for the exemption. Therefore, the Revenue's appeal was rejected, and the impugned order was upheld.