TaxTMI 
TaxTMI 
2025 (3) TMI 330
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..../s Stanley Controls vide an agreement on 28.01.2013 and intimated department, vide letter dated 04.02.2013, about relocating, expanding, shifting with addition of new products; vide another letter dated 25.03.2013, the appellants expressed their intent to avail the said area-based exemption for residual period; further, vide letter dated 09.01.2014, the appellants intimated about shifting to new location at Kharanwala Road, Village Tahliwal, Post Office Manpura, Baddi and intimating that they have started production of new products i.e. OSAA and would continue to avail the exemption eligible to M/s Stanley Products. A letter cum show cause notice dated 11.02.2014 was issued to the appellants proposing to deny the area- based exemption on the grounds that they had not intimated the dates of shifting to new factory premises; they did not submit a Chartered Engineer certificate in Proforma-I as per Trade Notice no. 07/2012 dated 02.05.2012 and violated Board's circular No. 960/3/2010-CX dated 17.2.2010 and 960/03/2013-Cx3 dated 21.2.2012. Original Authority vide order dated 04.07.2014 rejected the claim of the appellant. An appeal filed by the appellants before the Commissioner (A....
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....fit of exemption, after taking over unit of M/s Stanley Controls; department did not file any appeal against the said order; the issue has attained finality and the same cannot be disputed as held in M/s M. Nagabhushana v. State of Karnataka - 2011 (271) ELT 481 (SC). Learned counsel submits that the doctrine of res-judicata is also applicable for subsequent proceedings; when the question arising for consideration and facts are almost identical to previous case, revenue cannot be allowed to take a different stand. He relies on the following cases: - * ITC Ltd. v. Commr. of CGST & C. Ex., Kolkata North - 2020 (374) ELT 737 (Tri. - Kolkata); * Madura Coats v. ACCE - 2002 (139) ELT 17 (Cal); * Kothari Products v. CCE - 2002 (150) ELT 487 * Elecon Engineering Co. Ltd. v. Union of India - 2005 (188) ELT 257 (Guj), * Duncan Industries Ltd. v. CCE 2006 (201) ELT 517 (SC); * Union of India v. Upper Ganges Sugar and Industries Ltd. - 2005 (179) ELT 277 (SC). 5. Learned Counsel for the appellants submits further that the appellant is entitled to area-based exemption; M/s Stanley Controls was a running unit, engaged in the manufacturing of Solenoid Valves since 2009 and when it w....
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....using the same plant and machinery. He submits that the Appellant set up new plant and machinery in order to manufacture new products; Board, vide Circular No. 939/29/2010-CX., dated 22.12.2010, clarified that 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. 7. Learned Counsel for the appellants submits further that Electricity bills for the period April 2013 to February 2014 show that the Appellant had consumed total 3514 units of electricity; it further shows that the Appellant was carrying out production activities in the unit even after acquisition in February 2013; there is no dispute that the unit was manufacturing solenoid valves and thus, a functional unit; the Appellant has also met all other requisite conditions, like submission of a fresh declaration opting to avail exemption; and relocating to new premises in an area specified in the Exemption Notification. Thus, the Appellant has fulfilled all necessary conditions to avail the benefit of exem....
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....credit were not disputed by the department for last 8-9 years; the Ld. Commissioner cannot dispute the claim of Cenvat credit now and more so, when there is no allegation of wrongful availment of Cenvat credit in the SCN; it a settled judicial position that a show cause notice is foundation of judicial proceedings of any case and in no circumstances, the findings of any adjudicating authority or appellate authority can go beyond the allegation already framed against the Appellant in the SCN, while passing the order. He relies on. * R. Ramadas v. Joint Commissioner of C. Ex., Puducherry - 2021 (44) GSTL 258 (Mad.) * CCE Mumbai v. Toyo Engineering India Limited - 2006 (201) ELT 513 (S.C.); * CCE Nagpur v. Ballarpur Industries Ltd - 2007 (215) ELT 489 (S.C.); * CCE v. Champdany Industries Ltd. - 2009 (241) ELT 481 (S.C.); * Sachin Gandhi v. CCE - 2016 (339) ELT 73 (Tri. - Ahmd.) 12. Learned Counsel for the appellants submits lastly that charging of interest under the provisions of section 11AA of the Act is not proper and legal since the demand of duty itself is not sustainable; the Appellant has already deposited the entire duty amount before issuance of show cause notice,....
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....e adjudicating authority or the appellate authority; no evidence documentary or otherwise has been brought on record by the appellants that M/s Stanley Controls was a working unit prior to its takeover by the appellants; Therefore, it is clear that M/s Stanley Controls was a non-working and a defunct unit at the time of its sale and therefore not eligible for area based exemption as envisaged under notification no. 50/2003-CE dated 10.06.2003 as amended. He submits that the appellants have purchased an ineligible unit, they are also not eligible for area-based exemption. As such, the appeals filed by the appellants are liable for rejection. 15. Heard both sides and perused the records of the case. Among the two appeals, Hon'ble Supreme Court set aside the final order No 61111/2016 dated 11.08.2016, passed in appeal No E/51033/2015 and remanded back, vide order dated 25.07.2018, in Civil Appeal No. 831/2018, for a fresh consideration giving findings on the observation by the authorities below on the contention advanced on behalf of the appellant-Revenue that M/s. Stanley Controls at the relevant point of time i.e. when the respondent had taken over was a non-functional unit and has....
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.... the order of the learned Tribunal and remand the matter for de novo consideration on the point indicated above. The appeal consequently is allowed. 17. On a Perusal of the order as above, it is clear that the earlier order passed by this bench is set aside and remanded back for de novo consideration. Therefore, we are of the considered opinion that the scope of the remand is not limited as submitted by the learned Counsel for the appellants. However, Hon'ble supreme Court has directed this bench to reconsider the point raised in the civil appeal by Revenue. 18. It will be beneficial to have a look at the findings of the OIO and OIA in this regard. The original authority and the appellate authority conclude that the appellants were required, in order to continue to avail the benefit of area based exemption, to initially shift their old business to new location and thereafter could have undertaken necessary expansion or addition of new plant and machinery therein for manufacturing the additional new product; however, by mentioning in their letter dated 09.01.2014 about shifting to new premises and intending to commence production of additional products, the applicant had taken ove....
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....s 2008 09, 2009-10, 2010-11, 2011-12 & 2012-13, are said to have been assessed by the Sales Tax Department of HP; however, it has been observed that except for Quarterly Return for the QE March 2010, all the Sales tax Returns have been filed late by both M/s Stanley's/appellant; it again point towards defunct nature of unit and being filed by them to show a closed unit as an operational one. 20. The appellate authority finds as follows: * The appellant vide their letter dated 04.2.2013 have conveyed their desire to avail the facility of expansion, shifting and addition of new products; Chartered Engineer's certificate (Part-1) about the present status of the factory was also enclosed as mentioned in the letter; However, this Chartered Engineer's certificate was dated 08.2.2014 which was enclosed with their letter dated 04.2.2014; validity of the certificate is in doubt as certificate has been presented to the department before its date of issue; accordingly, it cannot be said that machinery was there in the unit purchased by the appellant. * The appellant has not followed the procedure laid down by the Board vide circular No. 960/03/2012-CX dated 17.02.2012; * it....
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....ification has given permission to M/s Stanley controls to avail exemption: District industries Centre DIC has permitted; Chartered Engineer certified the shifting and installation/commencement of production; it is incorrect to state that the unit was not functioning; even if it is assumed that the unit is not functioning, there is no condition that the said unit must be functioning on the day of transfer. We find that the OIO and OIA have negate the claims of the appellant by finding that the claim of the appellant is fake and that available evidence indicates that M/s Stanley Controls was not operational on the date of transfer. It is stated that M/s Stanley Controls has filed returns for all the quarters, for the period 30.09.2009 to 31.12.2012, on one single date i.e on 14.01.2013 together just before the takeover; they have shown production/clearance of 80 Nos of Solenoid Valves valued at Rs 73,301, during the quarter ending September 2009, whereas they have shown clearance of 1050 Nos of said valves valued at Rs. 36, 750 without showing any production of these valves in the register for the quarter ending 31.12.2012; even after filing declaration dated 25.03.2013 by the applic....
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....d under notification no. 50/2003-CE dated 10.06.2003 as amended. Consequentially, the appellants having purchased an ineligible unit, are also not eligible for area-based exemption. 24. The appellants on one hand claim that the unit was working at the time of takeover and on the other hand no production of solenoids is recorded during the period the unit was under their control and was not shifted or was in the process of shifting. They submit a post-dated Chartered engineer's certificate to show the shifting of the unit. We are of the considered opinion that no prudent person and there too a business man would take control of a unit, keep it idle for some time; claim shifting of plant and machinery to another unit and keep them idling or scrap it and install new machinery for a different product; continue to produce the same product i.e. OSAA, which they were manufacturing before acquiring the unit of M/s Stanley controls alleged to be manufacturing solenoids. The conclusion drawn in the OIO and OIA that in all probability, the appellants have installed new machinery to manufacture OSAA after the cut-off date and attempted to use the exemption that was available to a defunct unit....