AI Drafter 
TaxTMI 
TaxTMI 
2022 (10) TMI 263
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....est and penalty. It needs to be noted that Excise Appeal No. 50541 of 2022 relates to order dated 23.10.2019 passed by the Assistant Commissioner adjudicating the show cause notice dated 23.03.2018, while Excise Appeal No. 50543 of 2022 relates to the order dated 17.09.2019 passed by the Assistant Commissioner pursuant to the remand order passed by the Tribunal on 04.01.2018. 2. Excise Appeal No. 51926 of 2018 has been filed by the appellant to assail the order dated 28.03.2018 passed by the Commissioner adjudicating the show cause notice dated 06.06.2017 by denying the exemption claimed by the appellant under the notification and also confirming the demand of Central Excise duty of Rs. 2,51,52,996/- with interest and penalty. 3. The issue that arises for consideration in these appeals is regarding the exemption from the whole of the duty of excise in regard to goods manufactured in specified areas in the States of Uttarakhand and Himachal Pradesh. The Central Government exempted the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 [the Tariff Act] and cleared from a unit located in certain specified areas from the whole of ....
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....nufacturing excisable goods, namely step ladder and door canopies. It claims to have started commercial production and to have cleared 10 pieces of two step ladders by invoice dated 30.03.2010 bearing number 592. It further claims to have sold the said items on 30.03.2010 to M.R. Traders. To avail exemption under the notification, ATSPL filed the prescribed declaration dated 30.03.2010 and intimation regarding commencement of production was also filed on 30.03.2010 in the office of the Assistant Commissioner of Central Excise. However, ATSPL withdrew the application claiming exemption, by a letter dated 06.04.2010. A letter dated 08.04.2010 was also submitted by the Manager of ATSPL to the Superintendent mentioning therein that due to some unavoidable circumstances it was not availing the exemption. In the said letter, reference was also made to the earlier letter dated 06.04.2010 submitted by ATSPL to the Deputy Commissioner for cancellation of the declaration. Subsequently ATSPL obtained Central Excise registration on 04.06.2010 and started paying duty on the goods manufactured. 5. The Central Board of Excise and Customs [CBEC] sent a letter dated 17.03.2008 to the Chief Commi....
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....red for a period of ten years from the date of commencement of commercial production. The provisions of these notifications do not place a bar or restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after the cut-off date and during the exemption period of ten years as per the notification. Therefore, it is clarified that in all the above situations, the benefit of the excise duty exemption under the notifications would continue to be available to eligible industrial units. However the period of exemption would remain ten years and would not get extended on account of such modifications or additions under any circumstances." 7. The Tax Research Unit of the Department of Revenue also clarified by a letter dated 26.04.2012 that an eligible unit can exercise option even after the sunset clause for the purpose of availing benefit of the exemption under notification as sunset clause was relevant only for eligibility. The relevant portion of the communication is reproduced below:- "2. The matter has been examined. According to the condition of the notification, the manufacturer who intends to avail of the ....
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....ation to matters Central Excise etc and the Assignor shall lose its right on all such rights as accrued or obtained by the Assignor till the date of execution of the deed. xxxxxxxxxxxx 13. That simultaneously upon execution of the Deed of Sale/Transfer, the Assignor shall handover vacant and peaceful possession of the said Industrial property to the Assignee along with all the title documents in original thereto including the permissions, licenses, drawings etc. xxxxxxxxxxx 15. That at the time of execution of Deed of Sale/Transfer, the Assignor shall sign all requisite Applications, forms etc. for the effective transfer of the said Industrial property in favor of the Assignee along with the Transfer of Electricity, Water, Sewage & other service connections along with the Security Deposits made thereto by the Assignor in favor of the concerned Department/Agencies. The Assignor shall render all the necessary assistance for the Transfer of the connections referred herein. xxxxxxxxxxxx 19. That both the parties shall be bound by the terms and conditions of this Agreement to Sell and shall comply with the same in letter and spirit."....
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....tant Commissioner denied the said exemption to the appellant by letter dated 17.08.2015 for the reason that the appellant did not fulfill the mandatory requirement/formalities of availing exemption under the notification. The appellant filed an appeal before the Commissioner (Appeals) and by an order dated 25.04.2016 the appeal was dismissed. The relevant portion of the order of the Commissioner (Appeals) is reproduced below:- "Thus, from the above discussed case laws, it is quite evident that the benefit of Notification No. 50/2003-CE dated 10.06.2003 is available only when declaration, as prescribed, is filed before effecting first clearance and since in this case after signing of Memorandum of Undertaking on date 01.03.2013 the appellant filed a letter dated 06.02.2015 after nearly 23 months, hence I find that the appellant has filed to fulfill the conditions as laid down vide CBEC Circular No. 960/03/2012-CX.3 dated 17.02.2012. Further when the original owner had given up his claim for exemption in 2010 itself, the new owner cannot after 3 years lay claim to that exemption without fulfilling any of the essential conditions stipulated in the relevant Notifications." ....
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....r the manufacturing unit from availing area based exemption from any particular date, but the choice made should be applicable for the whole financial year. Except for this stipulation, there is no condition regarding opting in or opting out of the scheme by the manufacturing unit during the applicable period of notification. The main grievance of the appellant is that they have given due intimation on 27/08/2013 to avail area based exemption and thereafter continued to file regular quarterly returns claiming such exemption. It is submitted that the Revenue recording wrong facts of date of Intimation under the notification denied the concession to them. 3. The learned AR contesting the appeal submitted that when the appellants have taken over the manufacturing unit on 01/03/2013 itself in terms of MoU, the intimation to avail area based exemption should have been filed immediately. Further, there is no merit in the claim of the appellant that they can opt for exemption any time in the financial year. The scheme is to be operated for the whole financial year and there is no provision for opting in or opting out in the middle of the financial year. Regarding intimation given....
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.... issued by the Board on the said notification. 7. Accordingly, the impugned order is set aside. The matter is remanded to the Original Authority for a fresh decision. The appeal is allowed by way of remand." (emphasis supplied) 16. Earlier, the Commissioner had issued a show cause notice dated 06.06.2017 to the appellant for the period from July 2013 to December 2016 to show cause as to why the exemption claimed under the exemption notification should not be denied and Central Excise duty amounting to Rs. 2,51,52,996/- should not be demanded with interest and penalty. The appellant submitted a reply but this show cause notice adjudicated upon by the Commissioner by order dated 28.03.2018. The benefit of the exemption notification was denied and the demand proposed in the show cause notice was confirmed. It is against this order dated 28.03.2018 passed by the Commissioner that the appellant has filed Excise Appeal No. 51926 of 2018. 17. The Assistant Commissioner also issued a show cause notice dated 21.03.2018 to the appellant proposing a demand of Central Excise duty of Rs. 31,16,508/- with interest and penalty for the period January, 2017 to March 2017. This sho....
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....e benefit of the notification. The Tribunal had directed the Original Authority to provide a copy a letter dated 08.04.2010 purported to have been given by the Manager of ATSPL to the department; and iii. The Tribunal required that Circular of the Board should be considered while deciding the matter afresh. 20. The findings recorded by the Commissioner (Appeals) in the order dated 23.03.2021 are as follows: "7.4. This has an immediate consequence that the 'unit', that they had taken over in 2013 is no longer a 'unit' that was availing the benefit of the exemption notification No. 50/2003-CE dated 10.06.2003, as the very act of trying to claim that benefit vide its letter dated 30.3.2010 had become null and void vide their own letter dated 8.4.2010 in fact, they were duly paying duty thereafter. 8. However, I also find that M/s ATSPL were manufacturing completely different products and the appellant after its takeover in 2013 was manufacturing completely different products which requires different kind of plant and machinery. As such, on this score too, they have not taken over the same 'unit' which was being run by M/s ATSPL. What they have actually ta....
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....tion of the facts. The submission of the learned counsel for the appellant, therefore, is that the Assistant Commissioner could not have decided issue beyond the terms of the remand order. 22. Shri Sanjay Kumar Singh, learned authorized representative appearing for the Department, however, placed emphasis on the operative part of the order of the Tribunal contained paragraph 7 and submitted that since the impugned order was set aside and the matter was remanded to the original authority for a fresh decision, the original authority was justified in examining the issues regarding exemption under the notification claimed by the appellant in its entirety rather than restricting it to only the determination of the date of filing of the intimation to the Department by the appellant. 23. The Tribunal, in its decision dated 04.01.2018, noted that though ATSPL had, after signing of MoU on 01/03/2013 sent a communication dated 06.09.2013 to the Assistant Commissioner for availing the area based exemption w.e.f. 22.04.2013 but the appellant had also, after execution of the sale deed on 14.08.2013 and taking of the possession, submitted the option in writing/declaration to the Assistant ....
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....or claiming exemption had to be examined. 27. Learned counsel for the appellant is justified in asserting that the Assistant Commissioner could not have proceeded to decide whether other factors, apart from the date of filing of the declaration, were at all required to be examined. The Commissioner (Appeals) committed the same illegality by examining host of other factors for coming to a conclusion that the appellant was not entitled to the benefit of the notification, instead of restricting his decision only on the issue as to whether the intimation was given by the appellant on 27.08.2013 or on 06.02.2015 for availing the benefit of the notification. 28. In this connection reference can be made to a Larger Bench decision of the Tribunal consisting of five Members in HI-Tech Arai Ltd. v/s Commissioner of Central Excise, Madurai [[2008] taxmann.com 1384 (Chennai-CESTAT)]. The Tribunal observed that when the remand order specifically states the issue to be decided, the lower authority cannot travel beyond the scope and entertain new pleas. The relevant potion of order of the Tribunal is reproduced below:- "4. After giving careful consideration to the submissions, we n....
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.... in favour of the appellant. The Assistant Commissioner or the Commissioner (Appeals) could not have examined any other issue for determining as to whether the appellant was entitled to exemption under the notification. 31. Learned counsel for the appellant also, in the alternative, submitted that the findings recorded in the order dated 23.03.2021 passed by the Commissioner (Appeals) are incorrect and against the terms of the notification and the Circular. 32. The Commissioner (Appeals) has held that the 'unit' which the appellant had taken over in 2013 is not the 'unit' that was intending to avail the benefit of the exemption notification because initially ATSPL had claimed the benefit of the notification by a letter dated 30.03.2010, but it had subsequently expressed its unwillingness to claim exemption by a letter dated 08.04.2010 and in fact paid excise duty thereafter. The Commissioner (Appeals) also noticed that ATSPL was manufacturing different products than the products manufactured by the appellant after purchase in 2013. Thus also, according to the Commissioner (Appeals), it is not same 'unit' that was taken over by the appellant. In fact, the Commissioner (Appeals....
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....e started availing of this exemption without filing the declaration. The declaration as per the requirement of condition No. (i) and (li) of the first para of the exemption notification was filed only on 28/6/10. The Department's case is that in view of the sun set clause prescribed in para 3 of the notification, the declaration filed after 31/3/10 is not valid and hence the appellant would not be eligible for this exemption notification at all. However, we find that this very point had been considered by the Board and the Board vide Circular No. 332/23/11-TRU dated 26/4/12 has clarified as under:- xxxxxxxxx In view of the above Circular of the Board, we hold that the basis for denying the exemption on the ground that the declaration was filed after 31/3/2010, is not correct." 35. The Commissioner (Appeals) also ignored the submission advanced on behalf of the appellant that the order passed by the Assistant Commissioner went beyond the remand order merely for the reason that the appellant had stated that they were not aware of the letter dated 08.04.2010. This statement, according to the Commissioner (Appeals), meant that the appellant committed perjury wh....