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2019 (1) TMI 5 - CESTAT CHANDIGARHArea Based Exemption - N/N. 50/2003-CE dated 10.06.2003 - new products added by installing fresh plant machinery i.e. cosmetics and homeopathic drugs medicaments - exemption w.e.f. 04.05.2017 till 22.03.2020 allowed or not - denial of exemption on the ground that the appellant has established a new unit with new plant and machinery to manufacture totally different products - CBEC circular no. 939/29/2010 dated 22.12.2010 - no SCN was issued to the appellant to deny the exemption sought by the appellant. Held that:- On going through the said circular, we find that the notification do no 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 cutoff date and during the exemption period of ten years - Admittedly, the appellant has manufactured new products by addition of plant and machinery, therefore, the items sought to be added by the appellant in their exemption are covered by the CBEC Circular dated 22.12.2010 and the circular issued by the CBEC is binding upon the adjudicating authority. CBEC circular dated 22.12.2010 is binding on Ld. Commissioner and as per the said circular, the appellant is entitled to add new plant and machinery and he can manufacture of new products in terms of Notification No, 56/2003-CE dated 10.06.2003. The ld. Commissioner in the impugned order has observed that the appellant is having another unit and exemption to that unit has been expired on 30.04.2017, therefore, in the guise of addition of new items, the appellant sought addition of the new items - the said observation made by the ld. Commissioner is only assumptive and presumptive as the another unit of the appellant is still in existence. Although, the exemption has been expired but unit is still functionary, therefore, it cannot be said that the unit no. 1 has been transferred to the present unit i.e. ‘Appellant’ and in the guise of the addition of new products, the appellant is seeking exemption for goods manufactured by the unit no. 1. Further, no show cause notice has been issued to the appellant to deny the exemption sought by the appellant, which would enable to file their counter to the allegation for denial of exemption to newly manufactured item - the order of denial of exemption to new products is bad in law. The appellant is entitled for all the new items namely cosmetics and homeopathic drugs medicaments for benefit of exemption Notification No. 50/2003-CE dated 10.06.2003 till 22.03.2020 - appeal allowed - decided in favor of appellant.
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