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TaxTMI 
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2025 (9) TMI 475
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.... Appellant has applied for Central Excise Registration on 30.03.2017 and it was issued by the Range Superintendent on 31.03.2017. The Appellant claimed that they are eligible for the benefit under the exemption Notification No. 20/2007-C.E. dated 25.04.2007 as they have complied with all the conditions stipulated in the said Notification for availing the said exemption. 1.1. Since the exemption under the above said Notification is available to industrial units for a period of ten years, it was alleged by the Revenue that the Appellant had deliberately obtained registration of the new unit in the name of "M/s. Sriram Fasteners" on 31.03.2017 in the same premises where the erstwhile unit by the name of "M/s. Satyam Alloys" was functioning, which had already availed the said exemption for a period of ten years. Accordingly, an investigation was initiated against the Appellant on the ground that the Appellant had not started a new industrial unit and thus were ineligible for the benefit of exemption provided under Notification No. 20/2007-C.E. dated 25.04.2007, as amended. 2. A Show Cause Notice dated 13.11.2018 was issued to the Appellant inter alia proposing to deny the eligibi....
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....d order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) was made on 31^st March, 2023 allowing the appeal of the respondent. If vital or material evidence has not been considered by the adjudicating authority in passing an order, it suffers from a patent error of law on the face of it. Thus, a substantial question of law would arise for determination by the Court exercising supervisory jurisdiction. On going through the impugned order of the Tribunal, it appears that without material evidence to support such an order, it has set aside the order-in-original and the order passed by the Commissioner (Appeals), which have substantially based on factual findings. The facts which were material before the Tribunal were drawn these: (a) whether the respondent was a new industrial unit? (b) whether it commenced production prior to 31^st March, 2017? (c) whether in the alternative, the subject industrial unit has made expansion by at least 25 per cent and commenced production before 31^st March, 2017? and (d) whether the respondent is entitled to the benefit of notification No. 20/2007 dated 25th April, 2007 which allow....
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....Whether the Appellant is entitled to the benefit of Notification No. 20/2007 dated 25th April, 2007 which allow exemption to a new unit for a period of ten years if it is new, located in the designated area and commenced production prior to 31st March, 2017? Question No. (a): Whether the Appellant was a new industrial unit? 7. Central Excise Exemption Notification No 20/2007-C.E. (North East Excise Exemption) dated 25.04.2007 provides exemption in the following manner: - "5. The exemption, contained in this notification shall apply only to the following kind of units, namely: - (a) New Industrial units which commence commercial production on or after the 1st day of April, 2007 but not later than 31st day of March, 2017; (b) Industrial units existing before the 1st day of April, 2007 but which have undertaken substantial expansion by way of increase by not less than 25% in the value of fixed capital investment in plant and machinery for the purposes of expansion of capacity/modernization and diversification and have commenced commercial production from such expanded capacity on or after the 1st day of April, 2007 but not later than 31st day of March,....
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....ntity. (e) No Evidence of a New Setup (Paragraph 4.9 of the Order-in-Original): The ld. adjudicating authority concluded that there is no evidence of the establishment of a new factory or unit. The existing setup appears to be a continuation or restructuring of the previous unit rather than the creation of something entirely new. 7.2.1. Based on these findings, the Ld. Original Authority has held that M/s. Sriram Fasteners cannot be considered as a distinct or new entity, but is essentially a continuation of M/s. Satyam Alloys. This decision led to the denial of the claimed benefit of exemption, emphasizing the overlap in operations, ownership, and use of assets between the two entities. 7.2.2. The Appellant submitted proof of statutory compliance in setting up of a new industrial unit, which we have perused and our observations on those documentary evidences submitted by the appellant, supporting their claim that they have indeed commenced commercial production of a new industrial unit w.e.f. 31.03.2017, are summarized below: (1) SINGLE WINDOW AGENCY (SWA) Certificate issued by the Director of Commerce and Industries, Government of Meghala....
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....thority for commencing trial run with effect from 30.03.017: (2) COMMERCIAL PRODUCTION INTIMATION TO DC, CENTRAL EXCISE Intimation to the Jurisdictional Deputy Commissioner of Central Excise dated 31.03.2017 for commencing Commercial Production with effect from 31.03.2017. 8.1. We also find that the Appellant has submitted installation of machinery chart which would show, both the units are separate, distinct and independent. 8.1.1. With regard to setting up of the new unit in the name of M/s. Sriram Fasteners, the appellant submitted that M/s. Sriram Fasteners specializes in the production of M.S Bolts, Nuts, Chain Link Fencing, Barbed Wire, and Cold Ribbed Bars, utilizing precision-oriented machinery such as cold forging headers, thread rolling machines, and chain link making equipment. The List of Plant & Machinery of M/s. Sriram Fasteners has been furnished as under: - List of Plant & Machineries of SRIRAM FASTENERS : The following machineries were installed for manufacture of M.S Bolt, M.S Nut, Chain Link Fencing, Barbed Wire & Cold Ribbed Bar, etc.: (1) Cold Forging Header for Bolt (2) Trimming Machine for Bolt ....
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....also legally flawed. Consequently, we are of the view that the presumption of equivalence is both factually and legally unsustainable. 8.3. We also observe that the issue about the commencement of commercial production has been discussed at paragraph 7 of the Final Order dated 31.03.2023 passed by this Tribunal. For the sake of ready reference, the relevant paragraph of the said Final Order is reproduced below: - "7. We find that the documentary evidences submitted by the Appellant listed in para 4 above clearly indicate that they have commenced production of their finished goods as on 31.03.2017. We find that the Appellant has installed machinery for manufacturing MS Bolt prior to 31.03.2017 and intimated the Department also. In fact, they have started procuring the machineries from 2016 itself. They have submitted invoices for the procurement of their main raw materials and the machineries required for manufacturing of their finished products namely MS Nut and MS Bolt. The commencement of commercial production on 31.03.2017 was also intimated to the Range Office vide letter dated 31.03.2017. However, there was no verification appears to have been done by the Range Off....
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....hat they have commenced commercial production on 31.03.2017 and effected clearances of 500 kgs. each of MS Bolt and MS Nut on payment of duty and filed ER 1 returns for the respective periods. These evidences clearly establish that the Appellant has in fact commenced commercial production as on 31.03.2017." 8.4. From the above, it is seen that a categorical finding has been given in the said Final Order dated 31.03.2023 concluding that the Appellant has indeed commenced commercial production on 31.03.2017. The evidences submitted by the appellant which we have analysed in paras 8 to 8.2 substantiate our earlier finding that the Appellant has commenced commercial production w.e.f. 31.03.2017. Accordingly, we hold that the appellant has commenced commercial production w.e.f. 31.03.2017. Question No.(c): Whether in the alternative, the subject industrial unit has made expansion by at least 25 per cent and commenced production before 31st March, 2017? 9. In this regard, we find it pertinent to refer to the relevant conditions of the Notification No. 20/2007-C.E. dated 25.04.2007, which is extracted below: - "5. The exemption, contained in this notification shall apply....
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....ions framed by the Hon'ble High Court of Meghalaya vide Order dated 24.10.2024 are therefore answered as under: (a) The Appellant has set up a new industrial unit. (b) The Appellant has commenced production prior to 31^st March, 2017. (c) The question of expansion by at least 25 per cent of the capacity does not arise as the appellant has set a new industrial unit and commenced production before 31^st March, 2017. (d) As the appellant fulfils all the conditions as stipulated in the Notification, we hold that the Appellant is entitled to the benefit of Notification No. 20/2007-C.E. dated 25th April, 2007 which allowed exemption to a new unit for a period of ten years if it is new, located in the designated area and commenced production prior to 31^st March, 2017. 12. The appeal stands disposed of thus. (Order pronounced in the open court on 12.02.2025) ============= Document 1 GOVERNMENT OF MEGHALAYA DIRECTORATE OF COMMERCE & INDUSTRIES 2ªd Floor, Administrative Building, Lower Lachumiere, Shillong - 793 001. Ph & Fax : 0364-2226253 Dated Shillong, the 4ª July, 2016. No. M/Dind/Genl/109/2015/35 To The Managing Partner, M/....
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.... € Yours faithfully, Hus .(M.B. Roy) Member Secretary, SWA Memo No. M/Dind/Genl/109/2015/35-A & Director of Commerce & Industries. Dated Shillong, the 44 July, 2016. Copy to : 1. The Principal Chief Conservator of Forests, Sylvan House, Lower Lachumiere, Shillong. 2. The Labour Commissioner, Lower Lachumiere, Shillong for enforcement of Labour Laws etc. as per decision of the Single Window Agency in its meeting held on 04.07.2013. 3. The Chairman, Meghalaya State Pollution Control Board, "ARDEN" Lumpyngngad, Shillong. 4. The Deputy Secretary to the Govt. of Meghalaya, Commerce & Industries Department, Shillong. 5. The General Manager, District Commerce & Industries Centre, Ri-Bhoi District, Nongpoh. 6. Unit's file Director of Commerce Mandarinas NEVES AIRAMS dustries BYRNIHAT (MEGHALAYA) Document 2 GOVERNMENT OF MEGHALAYA OFFICE OF THE GENERAL MANAGER: DISTRICT COMMERCE AND INDUSTRIES CENTRE RI-BHOI DISTRICT, NONGPOH CERTIFICATE ON COMMENCEMENT OF COMMERCIAL PRODUCTION TO WHOM IT MAY CONCERN This is to certify that M/s SRIRAM FASTENERS, 13th Mile, Tamulkuchi, Byrnihat, Ri-Bhoi District, bearing Udyog Aadhaar Memorandum N....
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....ion is verified and certified to be true. We also certify that all the aforesaid items have been duly paid for and no credit is raised there against in the books of the unit. For, HARI SINGH & ASSOCAITES CHARTERED ACCOUNTANTS FRN: 323509E Imwalla ANUPAM AGARWALLA Partner M.No. 065833 agh & Asp jatas .'s Date: 04th Day of May, 2017 Place: Guwahati Document 4 SF/16-17/01 Dated. Byrnihat 30.03.2017 To, The Superintendent Central Excise Range-1 Byrnihat Sub: Intimation regarding Trial Run Our ECC Code: - ADBFS4502MEM001 Respected Sir, With due respect, we would like to inform you that we are going to take Trial Run of our unit. From today ie 30.March.2017 Thanking you, Yours Faithfully. Sriram Fasteners Partner Dauph 30/03/17 Caatral Racias Erzalhai-t Range Certified As True Copy SRIRAM FASTENERS SRIRAM FASTENERS Corporate & Admin Off :: AIR ASSAM BUILDING S. J. ROAD, ATHGAON GUWAHATI - 781 001 Tel. :: 0361-2541072, 2632724 E-mail : [email protected] [email protected] [email protected] Factory & Head Off :: 13TH MILE. TAMULKUCHI BYRNIHAT · 793 101 DIST. RI-BHOI MEGHALAYA MOB :: 98567-09330 AV ....