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2018 (11) TMI 971 - AT - Central ExciseArea based exemption - relevant date for commencement of commercial production to avail the benefit of notification - N/N. 50/2003-CE dated 10th June - It has been held by the adjudicating authority that there was no DM/RO plant in the factory before 31.10.2003, which is one of the essential ingredient for the manufacture of the cosmetic products manufactured and cleared bythe appellant - whether or not the appellant commenced commercial production on or before 31st March, 2010, so as to avail the benefit of notification? Held that:- As the time limit for availing the notification the appellant was approaching fast the appellant decided to use distilled water for the purpose of manufacture of lotion and boosting shampoo. The department has not disputed the use of the distilled water for the manufacture of the above products - It has been affirmed by the Chemist of the unit that DM/RO plant is meant to produce distilled water required for the manufacture of their final product. The Appellant has used the distilled water for the manufacture of said product which cannot be disputed by the department. The only non-existence of the DM/RO plant will not prove that the products has not been manufactured by the appellant on or before 31.10.2010. The other ground taken by the department is that the Drugs Licence which is required for thepurpose of manufacture of the cosmetic products has been issued on 30.3.2010 and therefore, the appellant could not have manufactured the said product before obtaining the same from the competent authority. We have seen drug licence, it is issued by the competent authority on 30.3.2010 before commencement of last date as contained in the Notification No. 50/2003. The product which are being manufactured by the appellant is not the one which required the complex manufacturing process and in order to avail area based exemption before the expiry of the date they could manage to manufacture the goods before the last of the notification. The condition only prescribes that commencement of the production should start on or before 31.10.2010. It nowhere prescribes clearance of the goods before 31.10.2010, that is last date contained in the notification. Even if the appellant manufactured products before 31.10.2010, it cannot said with certainly that they not manufactured the goods before that date. The appellant has relied upon the various decisions about the excisability and marketability of the product. Excisability is to be decided on the point of manufacturing of the sale where marketability is altogether different event. The excise duty is required to be paid on the manufacture of the goods however, the payment of duty has been deferred to the marketing thereof. The department has not verified all these submissions made by the appellant and concluded that the manufacturing activity has not started before 31.3.2010, which is not correct on the part of the Revenue - The due verification was required to be done by the Revenue before proceeding with denial of exemption notification raising against the appellant - there is no evidence to the effect that these activities were not undertaken by the appellant. The appellant has started commencement of the production before 31.10.2010 and therefore, eligible for area based exemption - appeal allowed - decided in favor of appellant.
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