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2015 (2) TMI 702 - CESTAT NEW DELHIArea bases exemption - Compounded levy scheme for induction furnace units- Notification No. 50/03-CE- Held that- There is no dispute about the fact that the appellants unit was in existence much before the issue of exemption Notification No. 50/03-CE and was in existence when the compounded levy scheme for induction furnace units had been notified under Section 3A of the Central Excise Act, 1944. From the findings of the Commissioner in para 4.2 of the order dated 20th August 2008 it is clear that during 1997, the capacity of the crucible of the appellant unit had been determined as 3 M.T. vide order No. 53/IFU/ACP/2000 dated 31/7/2000 and on this basis the Commissioner has given a finding in absence of any evidence documentary or otherwise, regarding expansion of installed capacity before 07/1/03, it can be presumed that the production capacity was 3 M.T. before the specified date i.e. before 07/1/03. The only basis for denial of the exemption benefit is that this production capacity has not been achieved by some additional machinery and in this regard the Commissioner has rejected the appellant’s claim regarding purchase of some additional machinery and equipment on the ground that the claimed purchase of machinery/equipment by the appellant from outside the State of Uttaranchal is not recorded in the register maintained at the Commercial Tax Department check post. However, this finding of the Commissioner is contrary to the order dated 24/3/07 of the Deputy Commissioner, Uttaranchal Commercial Tax Department under Rule 41 (8)/Section 9 (2) of the Uttaranchal General Sales Tax Act. On going through this order, it is clear that the Commercial Tax Department has accepted the appellant’s claim regarding purchase of components of furnace from outside the state and has decided to impose penalty only on the ground that the procedure prescribed in this regard was not followed. In this order, the Deputy Commissioner has clearly mentioned that the purchases of the assessee have been found recorded in their books of accounts. In view of this, the ground on which the Commissioner has rejected the appellant’s claim regarding purchase of the induction furnace components is not correct. Moreover, it is also seen that the increase in the capacity had been achieved by increasing the height of the crucible and this fact has not been disputed. Once it is accepted that the increase in the capacity of crucible was achieved by increase in its height, in view of the judgment of Hon’ble Uttarakhand High Court in the case of Uttaranchal Iron & Ispat Ltd.[2008 (5) TMI 91 - CESTAT NEW DELHI], the benefit of exemption under Notification No. 50/03-CE cannot be denied. Decided in favour of appellant.
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