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M/s. Periashola Tea Factory (P) Ltd. Versus CCE, Salem

2015 (12) TMI 943 - CESTAT CHENNAI

Manufacturing and Clearance of Tea - purchase of green leaf from the small growers - Benefit of exempted vide Notification No. 4/99-CE dated 26.11.99 - The contention of the department in the SCN that the factory was not worked for six months is not correct - Held that:- Adjudicating authority had correctly held that the appellant factory was working throughout the year and complied the conditions of the notification and eligible for the benefit of the notification. It is not the case of the dep .....

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Accordingly, we uphold the adjudication order and the impugned order passed by the LAA is set aside. - Decided in favour of assessee. - E/1243/2004 - FINAL ORDER No. 41665 / 2015 - Dated:- 10-12-2015 - Shri R. Periasami, Technical Member And Shri P. K. Choudhary, Judicial Member For the Petitioner : Shri Mohammed Zakir, Adv. For the Respondent : Shri B.Balamurugan, AC (AR) ORDER Per P. K. Choudhary The appellant filed this appeal against the order of the Commissioner (Appeals) dated 31.03.2004, .....

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was that the assessee s factory should have worked for atleast six months during the preceding financial year. The assessee had availed the benefit of exemption from duty for the financial year 2000-2001 after filing the undertaking in terms of the said notification vide their letter dated 27.03.2000, which was acknowledged by the Assistant Commissioner of Central Excise, Coonoor Division on 31.03.2000. In the said declaration the appellant had declared that the factory had been working for at l .....

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ur days in the month of July, 1999 and undertook trial run on 24.03.2000, shows that they have not worked for six months. Hence, SCN was issued proposing demand of duty of ₹ 5,08,452/- along with interest on the clearance of tea and imposition of penalty under Section 11AC of CEA, 1944. On adjudication, the adjudication authority dropped the proceedings proposed in the show cause notice. Aggrieved by this order, the Revenue was in appeal before the Commissioner (Appeals). The Commissioner .....

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rom 01.04.1999 to 31.03.2000. The records maintained in the factory, which were produced before the adjudicating authority shows that works were undertaken under the head manufacture and wages were paid to the workers, GPF was deducted and electricity bills were paid. The contention of the department in the SCN that the factory was not worked for six months is not correct. He also submits that the word manufacture has not been mentioned in the said exemption notification. He further submits th .....

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ner (Appeals) that the appellant factory had not been working during the financial year 1999-2000, so far as to qualify themselves for availing the benefit of exemption from duty in terms of the aforesaid notification is not correct. He further submits that the tea factory is a seasonal factory, which undertakes the process for period not exceeding seven months in a year and the intention of the legislature has been to promote not only the interest of the small growers of tea but also to help te .....

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aring on behalf of the Revenue reiterated the findings of the Commissioner (Appeals) and submits that during the course of verification it was observed by the officers that the assessee had not fulfilled the condition (b) (ii) at Sl.No. IV of the said notification in as much as they had not worked for atleast six months during the preceding year ie. 1999-2000 so as to qualify themselves for the benefit of the exemption from duty in terms of the said notification. From the RGI Register maintained .....

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appellant assessee that maintenance and repair works are part of the manufacturing activity cannot be accepted in view of the definition of manufacture under Section 2(f) of the CEA, 1944, and the order of the Commissioner (Appeals) should be upheld. 5. We have heard the rival submissions. On perusal of the records, we find that the adjudicating authority has discussed the issue in detail and the relevant portion of the said order is reproduced for better appreciation of the case. 14. I am convi .....

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on smoothly. The argument that the exemption under Notification No. 41/99-CE dated 26.11.99 was permitted by the Department itself despite knowing the fact of stoppage of manufacturing activity for the period from 5.7.99 to 21.3.2000 cannot be swept under the carpet. A factory can be said to be non-working, if only the same is under lock out or on strike as there would be virtually no work under those circumstances. 15.1 The assessee had relied upon the decision of the Hon ble High Court of Madr .....

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r, I find that the evidences/documents placed before me are supportive of the contention of the assessee and due to the reasons already explained above, I am inclined to hold that the factory was working throughout the year satisfying the condition (b) (ii) at Sl.No. IV of Notification No. 41/99-CE dated 26.11.99. I agree with the assessees argument that there is no condition that the factory was manufacturing for minimum of six months during the preceding year. The requirement is that it shoul .....

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1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (2) of the Table below falling under sub-heading No. 0902.00 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) from the whole of the duty of excise leviable thereon under section 3 of the Central Excise Act, 1944 (1 of 1944), subject to the conditions specified in the corresponding entry in column (3) of .....

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n and from 10th December, 1999 to 31st March, 2000 shall be purchased from growers, each having a holding not exceeding ten hectares under tea cultivation. (ii) The factory has been working for at least six months during 1998-99. (c) In the first week of April, 2000, the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking. (d) In the event of his failure to satisfy the u .....

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ing that : (i) not less than two-thirds of the green leaf used by the factory, during the period from the date of the aforesaid undertaking till the end of the financial year, shall be purchased from growers, each having holding not exceeding ten hectares under tea cultivation. (ii) The factory has been working for at least six months during the year preceding the year in which the undertaking referred to in condition (b) is filed. (c) In the first week of April of each succeeding financial year .....

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. - For the purposes of this notification, bought leaf factory means a factory which purchases not less than two-thirds of the green leaf processed by it in the preceding financial year from any grower who has a holding not exceeding ten hectares of land under cultivation of tea. 6. The Hon ble Supreme Court in the case of M/s. Hari Chand Shri Gopal (supra), wherein at para -22 discussed the interpretation of the taxing statute which is reproduced as under:- Exemption Clause - Strict Constructi .....

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be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption. In Novopan Indian Ltd. (supra), this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish .....

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