TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 840
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....under Section 11AC and Rules 26 and 27 of Central Excise Rules are rightly imposed? 2. Brief facts are that the appellant is a partnership firm having their factory at Roorkee falling in the State of Uttarakhand. A private industrial campus was developed by the Partners of the appellant's firm and their relatives in Khasra Nos. 114, 115, 118 and 119 of Village Raipur, Bhagwanpur, Roorkee, District - Haridwar, Uttarakhand. The said land has been acquired by one of the Partners of the appellant firm alongwith relatives and friends. The industrial complex have been developed by laying in a private road/ lane, construction of boundary wall, construction of different sheds in the campus, so that industrial units could produce goods and avail exemption under the 'Area based exemption' Notification No. 50/2003-CE. 3. The Area based exemption under the said notification was available for a period of ten years to the units, which have commenced its commercial production (initially), or had undertaken expansion during 10.06.2003 to 31.03.2010. Such units should be located in the State of Uttarakhand or Himachal Pradesh. 4. All the units located in the different sheds availed 'Area based e....
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....acturing unit in question - main unit at Plot No. F/119, unit-II at Plot No. 115 and Unit 3 at Plot B/119, were found to be established at three different premises as detailed hereinabove in the sketch. 9. From the aforementioned sketch depicting the location of the unit(s), it appeared that the appellant had established their main unit at Plot No. F/119, Unit-II at Khasra No. 115 and Unit-III at Plot 'B' of Khasra No. 119. The other units /factory separated by open space and common private road, carved out alongwith their relocated main unit (shifted by them) as well as their expanded units (Unit-II and III), which appeared to be not adjacent to the main unit. 10. It appeared to Revenue that all the above three plots (Unit-I, II, III) were not adjacent to one another. Appellant deliberately tried to give evasive reply and created a virtual corridor in between those three units, in order to show that those units in question were adjacent. As M/s Jyoty Laboratories and M/s Fantasy were situated in between those units, even no real corridors was feasible to be built. Also their rent agreement does not divulge the above stated fact of 'virtual corridor' and it appears that M/s SD tr....
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....newly so-called adjacent plots so as to obviate the scrutiny in the backdrop of the clarification laid down by para 5 of CBEC Circular No. 960/03/2012-CX, dated 17.02.2012, as elaborated in previous paras, which might have led to discontinuation of exemption from payment of excise duty on the excisable goods, to be manufactured in these so-called adjacent/ extended premises. 13. Therefore, on the basis of the belief that M/s SD had been wrongly availing area based exemption from payment of excise duty under Notification No. 50/2003-CE, in respect of their so-called expanded units (Unit-II & Unit-III), which was not factually correctly disclosed to the Central Excise Department, with the sole intent to evade Central Excise duty on the excisable goods manufactured therein, the officers seized the stock of manufactured goods viz: 'Alovera Kanti Body cleanser Soap' (75 g. & 150 gm) valued of Rs. 1,11,15,702/- under Section 110 of Customs Act, 1962 as made applicable to Section 12F(1) of Central Excise Act, 1944 read with Rule 24 of Central Excise Rules, 2002, with the reasonable belief that the same were liable for confiscation under Rule 25 of the said rules under drawl of panchnama ....
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....on 4A of the Central Excise Act, 1944 read with Notification No., 49/2008-CE (NT). The gist of calculation of duty is tabulated as under:- Name of the finished goods Quantity of finished goods cleared upto 16.11.2016 (in pcs/ bottle) MRP/ Piece or unit Total value Abatement as per Nfn. 49/2008-CE (NT) Abated value Total duty payable @ 12.50% Alovera Kanti Soap 75 g. 34506144 13 448579872 30% 291576917 36447115 Alovera Kanti Soap 150 gm 5683392 25 142084800 30% 92355120 11544390 Amla Hair Oil 1958000 40 78320000 35% 50908000 6363500 668984672 Total 434840037 54355005 The above chart has been prepared based on the print out of stock/ sale ledgers for the above referred period, taken out from the computers of M/s SD on spot, on 17.11.2016 and has been duly acknowledged and signed by the authorised person i.e. Sh. Devender Dwivedi, Stock Manager of M/s SD, and has been admitted by Sh. Saurav Chabra, Working Manager of M/s SD in his statement recorded on 17.11.2016. 16. From the foregoing paras it appears that M/s SD was liable to pay Central Excise duty to the tune of Rs. 5,43,55,005/- on the abated v....
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....the said complex. Thus, this constitutes a single factory/ industrial unit. It has been clarified in Circular dated 17.02.2012, that on expansion of an eligible unit by acquiring an adjacent plot of land and installing new plant and machinery on such land, is akin to expansion by way of installing new plant and machinery. The underlying principal is that after merger, the two or more plots should become plot/ factory with a continuous boundary. A mere glance at the site plan as reproduced hereinabove 'forming part of the show cause notice', it would be noticed that the three plots put together form one single factory/ industrial unit, inasmuch as the boundary of the said units are continuous. Further, M/s Fantasy and M/s Jyoti Lab located on Khasra No. 118 and 119 respectively, have certified that they have independent entry /exit on south east side. Further, M/s S. Pal & Associates, Chartered Engineer have cerified that the factory located at Khasra No. 115 (unit-II), Plot B of Khasra No. 119 (Unit-III) and Plot F of Khasra No. 119 is having a continuous boundary. It is a single factory having an independent / separate entry / exit in North West. The adjudicating authority have....
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....h on account of hair oil alleged to have been manufactured in Plot B/119, whereas admitted fact is that Plot B have been used only for storage of raw material and finished goods. The facilities for manufacturing of hair oil is admittedly as Plot F/119, it is admittedly eligible for exemption. 21. Further, as the show cause notice has been issued within the normal period of limitation, thus, there was no mis-declaration on the part of the appellant. Hence, penalty under Section 11AC is not attracted. Further, admittedly goods were lying inside the factory, thus was neither liable for seizure nor confiscation. Thus, the confiscation / redemption fine and penalties on the appellant are fit to be set aside. Further, there was no instance of clandestine removal of goods, nor any clandestine activity of manufacturing. The whole issue is interpretational in nature. 22. Learned Authorised Representative appearing for the Revenue has relied on the impugned order. Further, reliance is placed on the ruling of Hon'ble Supreme Court in Commissioner of Customs (Import) Mumbai vs. Dilip Kumar & Company -2018 (361) ELT 577 (SC) wherein it has been held that in case of claim of tax exemption unde....