Exemption under Notification No. 50/2003-CE upheld on documentary proof of commercial production before the cut-off date.

Exemption under Notification No. 50/2003-CE was found available where the assessee supported commencement of commercial production before the cut-off date with declaration, purchase and transport records, electricity bill, balance sheet, trade tax return and a first invoice dated 30.03.2010. The department's reliance on the unit being found closed on 07.04.2010 and 08.04.2010 was held insufficient to displace that documentary material, because eligibility had to be tested on substantive evidence rather than presumption. On that basis, the condition in the notification was treated as satisfied, and the proposed demand of duty, interest and penalty was held not sustainable.

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Issues: Whether the respondent was entitled to exemption under Notification No. 50/2003-CE on the basis that commercial production had commenced on or before 31.03.2010, and whether the demand, interest and penalty could be sustained.

Analysis: The record showed that the respondent had filed declaration, produced purchase documents, transport documents, electricity bill, balance sheet, trade tax return and the first invoice dated 30.03.2010. The department relied mainly on the fact that the unit was found closed on 07.04.2010 and 08.04.2010, but that circumstance by itself did not establish that commercial production had not commenced before the cut-off date. The finding that exemption eligibility must be tested on substantive evidence, and not on mere presumption, was accepted. Since the department failed to produce cogent and corroborative evidence to dislodge the respondent's documentary material, the condition in the notification was held to have been fulfilled.

Conclusion: The respondent was held entitled to the exemption under Notification No. 50/2003-CE, and the proposed demand of duty, interest and penalty was not sustainable.

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