CESTAT held that the appellant was ineligible for area-based...

CESTAT held that the appellant was ineligible for area-based exemption under N/N. 50/2003-CE. The Tribunal determined that M/s Stanley Controls was non-operational at the time of transfer, despite contrary claims. Evidence showed the transferor filed multiple quarterly returns on a single date just before takeover, reported inconsistent production figures, and showed nil production after transfer. The appellant failed to provide documentary evidence contradicting the finding that the transferor was defunct. CESTAT concluded that a facade of taking over a working unit was created solely to avail exemption benefits, emphasizing that CBEC Circular permits transfer of functioning units, not merely exemption entitlements. The demand for duty, interest, and penalties was upheld.