AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 264
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....r this Notification No. 50/03-CE dated 10/6/03. 1.2 The exemption under Notification No. 50/03-CE in terms of its para 2 is applicable to the following kinds of units namely : "(a) new industrial units set up in the areas mentioned in Annexure II and III, which have commenced commercial production on or after 07/1/03 but not later than 31st day of March, 2010 (b) industrial units existing before 07/1/03 in areas mentioned in Annexure II, but which have undertaken substantial expansion by the way of increase in installed capacity by not less than 25% on or after 07/1/03, and have commenced commercial production from such expanded capacity not later than 31/3/10 . 1.3 The appellant claim to be the unit covered by Clause (a) of para 2 of the notification which was a new unit set up after 07/1/03 and which according to the appellant had commenced commercial production on or before 31/3/10. Since, there was a doubt as to whether the unit had commenced commercial production on or after 31/3/10, the unit was visited by the Jurisdictional Central Excise officers on 04/5/10, by headquarters preventive on 06/4/10 and by the officers of Directorate General Central Excise Intelligenc....
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....nge for their subsequent sale. 1.5 It is in view of the above investigation that a show cause notice was issued to the appellant company for denial of the exemption. The show cause notice was adjudicated by the Deputy Commissioner vide order-in-original dated 05/9/11 by which after hearing the appellant, he held that they are not eligible for exemption under Notification No. 50/03-CE dated 10/6/03 or for Notification No. 49/03-CE dated 10/6/03. 1.6 On appeal being filed to Commissioner (Appeals) against this order of the Deputy Commissioner, the Commissioner (Appeals) vide order-in-appeal dated 7/12/11 dismissed the appeal against which the appeal No. E/576/2012 has been filed. 1.7 Subsequent to the denial of the benefit of the exemption notification, the Commissioner after issue of show cause notice vide order-in-original dated 21/2/14 confirmed the duty demand of Rs. 15,27,002/- against the appellant alongwith interest thereon under Section 11AB and imposed penalty of equal amount on them under Section 11AC. The Commissioner confirmed this demand after adjusting the Cenvat credit in respect of the inputs. Against this order of the Commissioner, the appeal No. 52979/2014 has be....
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....o applicable to the new industrial units which have commenced commercial production on or after 14/6/02 or to the existing industrial units which have undertaken substantial expansion by the way of increase in installed capacity by not less than 25% or on or after 14/6/02, that when in the present case, the District Industry Centre has given a certificate that the appellant unit had commenced commercial production prior to 31/3/10, this certificate should be accepted and that in view of the above submissions, the impugned orders are not correct. 4. Shri Yashpal Sharma, the learned DR, defended the impugned orders and pleaded that at the time of officer s visit to the unit on 05/4/10 and 06/4/10 and subsequently on 17/5/10, from the condition of the factory it was clear that it was not in a position to start production in as much as the installation/erection of the plant and machinery had not been completed, the construction of the furnace for melting and holding aluminium ingots was in progress and the casting machine was being assembled, that there was no electricity connection and though there was a DG set, the electricity produced by the DG set was being used for we....
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.... into account the circumstances and facts and in the present case, the circumstances of the case do not indicate that the appellant had commenced commercial production i.e. the production of saleable goods, on or before 31/3/10. He also pleaded that the Tribunal s judgment in the case of CCE, Jammu vs. Metal Extrusions (supra) does not help the appellant as in this case the Tribunal has held that the commencement of commercial production is a question of fact which has to be ascertained by the actual production in the factory and the certificate of the Director of Industries has only certain evidentionary value and the same cannot override the statutory records. He, therefore, pleaded that there is no infirmity in the impugned orders. 5. We have considered the submissions of both the sides and perused the records. 6. The appellant manufacture aluminium sheets/coils and have claimed for duty exemption under Notification No. 50/03-CE dated 10/6/03. The only point of dispute is as to whether the appellant are eligible for this exemption in terms of the conditions specified in para 2 of the notification. Para 2 of the notification reads as under :- "The exemption contained in this n....
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..../4/10 of Shri Dinesh Sharma, Supervisor of the appellant company though the factory had manufactured 5.5 MT of aluminium coil with the help of DG set on 30/3/10, the quality of the same was not up to the mark and the same had not to be sold and for this reason, the appellant had contacted the Chinese machinery supplier who had advised that some re-arrangement of the machinery on the production line is required and that for this reason, they had removed the machinery and were waiting for the Chinese Engineers to install the machinery, and (4) manufacture of aluminium sheets/coils is a continuous casting process and involves installation of critical machinery of casting furnace, holding furnace, rolling unit etc. which was either installed or was not in working condition. (5) The claim of having cleared and sold 3.48 MT of aluminium sheets on 31/3/10 to M/s Shirdi Sales was found to be false as M/s Shirdi Sales was found to be a dealer in particle board and medium density fibre board and its Director Shri Sanjay Bajaj in his statement dated 21/5/10 stated that they had not placed any orders for the said goods but they had been advised by the owner of the appellant company to receiv....
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.... determining the day of commencement commercial production is exactly when the process of commissioning was completed and plant was ready to manufacture the goods of the desired quality as per installed capacity. 9. The point of dispute in the present case is as to whether the appellant s plant had commenced commercial production in the sense that the commissioning of the plant was completed and plant was ready to manufacture the goods of the desired quality as per the installed capacity. For being eligible for the exemption notification, it is necessary that the commencing of the commercial production should have been taken place on or before 31/03/2010. Though the appellant had intimated the Jurisdictional Central Excise officers about availment of this exemption under their letter dated 23/03/2010, their unit was not visited by the Jurisdictional Central Excise Officers during the last week of March, 2010, which was the crucial period for determining as to whether the plant was in position to commence commercial production or not. If the plant had been visited by the Jurisdictional Central Excise officers on 31/03/2010 and got surveyed by a Chartered Engineer and his opinion on....