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M/s. Pam Cosmetics & Glasses (P) Ltd. Versus CCE-Chandigarh-I

Area based exemption - dispute is about another manufacturing unit (unit II) claimed to have been set up by the appellant company in March, 2010 on the first floor of the same building and this unit is also for manufacture of the same products - Denial of duty exemption under notification no. 49/03CE - Clubbing of clearances - Held that:- Goods manufactured from the new machinery, if any installed, in the name of Unit-II on the first floor would be eligible for duty exemption under notification .....

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r of the Unit-I appears to be an attempt by the appellant company to enjoy the exemption in the name of Unit-II for another period of ten years. Since, we have held that Unit-II has no existence and Unit-I and Unit II have to be treated as one unit, the same would be eligible for exemption only for a period of ten years from the date on which the unit-I had commenced commercial production - Appeal disposed of. - Appeal No. E/3466/2012-EX [DB] - Final Order No. 51934/2015 - Dated:- 17-6-2015 - Sh .....

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exemption under notification no. 49/03CE and had commenced commercial production sometimes in 2004. However, the dispute in the present case is not about this manufacturing unit but is about another manufacturing unit (unit II) claimed to have been set up by the appellant company in March, 2010 on the first floor of the same building and this unit is also for manufacture of the same products. According to the appellant company, the Unit II had commenced commercial production w.e.f. 29/03.2010 an .....

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ictional Central Excise Officers on 25/8/2010 and thereafter, again on 23/11/2010. According to the report of the Visiting Officers - (a) while Unit-I has manufacturing process in a portion of first floor and the injection moulding thereon of Unit-I has also been installed on first floor, the Unit-II has also its manufacturing activity on the same floor, (b) there is no demarcation or boundary between Unit I and Unit - II;(c) there are two injections moulding machines put together on first floor .....

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) was going on both the machines and on enquiry with supervisor, it was reported that the goods under production both the machines are for Unit-I. 1.2 In view of the above, the officers were of the view that the Unit-II has no independent existence and hence, the same would not be eligible for exemption notification no. 49/03CE. 1.3 After issue of show cause notice for denial of the exemption, the Jurisdictional Assistant Commissioner vide order-in-original dated 15/4/2011 held that the Unit-II .....

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s had not started commercial production on or before 31/3/2010 and had cleverly created evidence to show that they had complied with the condition of notification no. 49/03CE dated 10/6/2003. On appeal being filed to Commissioner (appeals) against this order, the Commissioner (appeals) vide order-in-appeal dated 30/7/2012 dismissed the appeal. Commissioner (appeals) in the impugned order held that Unit II, which is claimed to be a new unit set up by the appellant company, did not exist and it wa .....

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, raw material, finished the goods etc of the Unit-I had been shifted to the first floor; that just because of floods, the machinery and raw material of Unit-I had been shifted from ground floor to first floor, the appellant cannot be accused of creating the dummy Unit-II; that Unit-II has separate existence and is independently entitled for exemption notification no. 49/03CE; that machinery of Unit-I and Unit-II is separate; that just because on the date of officers visit, on account of floods .....

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at first floor of the building at 196/2/1, Moginand Nahan Road, District Sirmour, Himachal Pradesh and the unit is engaged in manufacture of moulded plastic products. On the ground floor of the same building, there is Unit-I of the appellant company manufacturing the same products and the old unit located at ground floor is operating since 2004. The old unit is also availing of exemption under notification no. 49/03CE. The Unit-II is claimed to have been set up in February/March, 2010 and accor .....

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pendent. In this regard, para 3 of the show cause notice dated 31/8/2010 issued by the Deputy Commissioner of Central Excise to the appellant unit is reproduced below: On scrutiny of the papers submitted by you and on the basis of the verification which was conducted on 25/08/2010 by the Superintendent of Central Excise Paonta Sahib, it has been found that (i) The unit is located on first floor of the Unit-I, (ii) Unit-II has manufacturing process in a portion on the first floor where the Unit-I .....

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one place, (viii) unit-II has applied for registration with DIC for manufacture of plastic goods and at the time of visit, the production of plastic goods (parts of the folding mirror) was going on both the machines. On enquiry from supervisors, it was reported that the goods under production at both machines are for Unit-I and (ix) the UnitiII is not independent and secure. In view of the above shortcoming it is difficult to identify the demarcation of the Units and it is evident that the Unit- .....

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emption under notification no. 49/03CE. The Assistant Commissioner has upheld the above allegation and it is this order of the Assistant Commissioner which has been upheld by the Commissioner (appeals) by the impugned order. 8. While according to the factual position mentioned in para 3 of the show cause notice dated 31/8/2010 and also discussed in the order passed in the Commissioner (appeals), we agree with the departments plea that two Units Unit-I and Unit-II cannot be treated as independen .....

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