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2019 (11) TMI 1615 - CESTAT NEW DELHIArea Based Exemption - requirement of exemption notification for a new industrial unit to claim exemption from payment of the whole of the duty of excise is that it should have commenced commercial production on or after 7 January, 2003, but not later than 31 March, 2010 - the condition of commencement of commercial production has not been found to have been satisfied by the Appellants by the Adjudicating Authority as also the Appellate Authority - contention of the Appellant that it had kept the raw material in a locked store room was not accepted and a finding was recorded that the Appellant had been bringing manufacturing goods from the Delhi unit - HELD THAT:- It is not in dispute that the main unit of the Appellant for manufacture of the four items declared by the Appellant is situated at Naraina, New Delhi. According to the Appellant, it purchased the plant/machinery at Roorkee sometimes in February/March, 2010. At Roorkee admittedly two units namely M/s SKN Bentex Lighting and M/s Bentex Control & Switchgear Company are running from the premises. In the present Appeals, the issues are only with M/s Bentex Control & Switchgear Company. The declaration submitted by the Appellant on 17 March, 2010 for claiming exemption from excise duty in terms of the exemption notification mentions that the Appellant intends to manufacture four items namely, Motor Starters, KWH Meters, Miniature Circuit Breakers and Change Over Switches. The Appellant, however, claims that it started commercial production of Motor Starters only prior to 31 March, 2010 and it did not start commercial production of KWH Meters. Miniature Circuit Breakers and Change Over Switches. To claim the benefit of the exemption notification, it was imperative for the Appellant to have substantiated that the new industrial unit set up by the Appellant had commenced commercial production on or after 7 January, 2003 but not later than 31 March, 2010. The main submission of the Appellant to substantiate that the commercial production started before 31 March 2010 is issuance of the invoices on 19 March, 2010 and the courier receipts. According to the Appellant, this fact is sufficient to prove that the commercial production started prior to 19 March, 2010 because in that case the invoices would not have been issued on 19 March, 2010 and nor the goods could have been dispatched by courier before 31 March 2010. This factual position cannot conclusively prove that the production of Motor Starters in the Roorkee unit started before 31 March, 2010 - According to the Appellant, it was for the Department to have interrogated the persons in whose favour the invoices had been raised. This submission cannot be accepted for the simple reason that it was for the Appellant to substantiate its claim that it had started commercial production on or before 31 March, 2010 and for this purpose, it was for the Appellant to submit all the relevant documents as evidence and it cannot be permitted to urge that it was for the Department to have interrogated such persons. The explanation offered by the Appellant that it was because of illiteracy of the labours engaged by the Appellant did not appeal either to the adjudicating authority or to the appellate authority nor does it appeal to us. When the basis for claiming exemption is that the commercial production at Roorkee unit should have started on or before 31 March, 2010, it is difficult to believe that senior officers of the unit at Roorkee unit would have overlooked this most important aspect, if the goods were actually manufactured at the Roorkee unit. The submission that raw material was brought from the main unit at New Delhi also does not help the Appellant. The position, as it emerges and which has also been recorded both by the Adjudicating Authority and the Appellate Authority, is that in order to claim the benefit of the exemption notification, the Appellant was bringing the final product from its main unit at Delhi to the unit at Roorkee to claim benefit exemption notification. The absence of any raw material in the Roorkee unit at the time of inspection does support this finding. If the Appellant was actually manufacturing Motor Starters, the electricity bill also would have given some indication but they also do support the case of the Appellant. The finding recorded by the Appellate Authority on this aspect cannot be said to be perverse. The claim for Cenvat credit on inputs, capital goods and input services has also rightly been denied to the Appellant by the Commissioner (Appeals) as the procedure laid down in the 2004 Rules had not been complied with by the Appellant. Learned Counsel for the Appellant could not satisfy that the requirement of the 2004 Rules had been satisfied. Penalty - suppression of facts or not - HELD THAT:- Penalty that has been imposed upon the Appellant has also been assailed by learned Counsel for the Appellant. The Commissioner (Appeals) has recorded a categorical finding that there was suppression of vital facts with an intention to evade payment of central excise duty by availing the benefit of the exemption notification, even though it had not started commercial production prior to 31 March, 2010 and it is only when a verification was carried out that the correct facts came to the light of the Department - This finding is based on a report submitted by the inspecting team that went for verification of the declaration made by the Appellant. The declaration was found to be false. It cannot be, therefore, be urged that the Appellant had no intention of evading payment of duty as a false declaration was deliberately made. Appeal dismissed.
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