https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=768450 https://www.taxtmi.com/caselaws?id=768450 Area Based Exemption - Eligibility for exemption under N/N. 50/2003-CE dated 10.06.2003 - goods manufactured and cleared from the factory of the appellant situated at 7 KM Stone, Muradabad Road, Kashipur - HELD THAT:- The order passed by the Tribunal shows that it was the adjudicating authority that had to visit the factory and decide the issue denovo. On record is an application dated 12.09.2018 submitted by the appellant which clearly mentions that the impugned order dated 20.03.2018 was passed by the Commissioner in contravention of the direction issued by the Tribunal and that too without affording any opportunity to the appellant. It also mentions that the adjudicating authority has relied upon a document which was neither a part of the show cause notice nor part of the earlier proceedings and no response was invited from the appellant. No reliance can, therefore, be placed on these two documents, which in fact are the sole document on the basis of which the Commissioner has recorded a finding that manufacturing activity is being carried out in Khasra No. 281. The Tribunal, in the order dated 31.01.2017, had clearly held that if no manufacturing activity was carried out in Khasra No. 281, the department would have no case. From a perusal of the layout plan and the report dated 20.01.2010 submitted by the lekhpal, it is clear that no manufacturing activity was carried out in Khasra No. 281. The layout plan, in fact, clearly shows that the manufacturing activity was carried out only in Khasra No. 284. Khasra No. 281 admeasures 290 Meters in length and 2.53 Meters in width. It has a boundary wall and according to the appellant only a sewer line for extermination of sewage from the factory passes through Khasra No. 281. It also has a small pit for treatment of the sewage before it is discharged in a government drain located in the said Khasra. No manufacturing activity, therefore, can be said to have been carried out in Khasra No. 281. The area of Khasra No. 281 is about 7% of the total area of the area covered by the Khasra No's. 281, 282, 283 and 284. The Exemption Notification is a beneficial notification for promoting manufacturing activity in the backward area of the State of Uttrakhand. Merely because Khasra No. 281 measuring 0.146 Hectares is not mentioned in Annexure-II of the Exemption Notification, which in fact includes Khasra No's. 282, 283 and 284, should not result in denying the benefit of the Exemption Notification to the appellant, when no manufacturing activity is taking place in Khasra No. 281. It transpires from the decisions of the Tribunal in Forbes & Company [2017 (10) TMI 73 - CESTAT ALLAHABAD] and Saral Wire Craft [2017 (7) TMI 1479 - CESTAT NEW DELHI] that where production is carried in a majority portion covered by the Exemption Notification, the assessee would be entitled to the benefit of the Exemption Notification. The decisions also hold that it is not necessary that every inch of the land should be utilized for installation of the machines for there can be some open area. In such cases, the benefit of area based exemption should not be denied when the plots are adjacent. Conclusion - No reliance can, therefore, be placed on these two documents, which in fact are the sole document on the basis of which the Commissioner has recorded a finding that manufacturing activity is being carried out in Khasra No. 281. The appellant is entitled to the exemption. Appeal allowed. Case-Laws Central Excise Wed, 02 Apr 2025 00:00:00 +0530