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TMI Blog2022 (10) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Excise Appeal No. 50541 of 2022 relates to order dated 23.10.2019 passed by the Assistant Commissioner adjudicating the show cause notice dated 23.03.2018, while Excise Appeal No. 50543 of 2022 relates to the order dated 17.09.2019 passed by the Assistant Commissioner pursuant to the remand order passed by the Tribunal on 04.01.2018. 2. Excise Appeal No. 51926 of 2018 has been filed by the appellant to assail the order dated 28.03.2018 passed by the Commissioner adjudicating the show cause notice dated 06.06.2017 by denying the exemption claimed by the appellant under the notification and also confirming the demand of Central Excise duty of Rs. 2,51,52,996/- with interest and penalty. 3. The issue that arises for consideration in these appeals is regarding the exemption from the whole of the duty of excise in regard to goods manufactured in specified areas in the States of Uttarakhand and Himachal Pradesh. The Central Government exempted the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 [the Tariff Act] and cleared from a unit located in certain specified areas from the whole of the duty of excise or additional duty of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and to have cleared 10 pieces of two step ladders by invoice dated 30.03.2010 bearing number 592. It further claims to have sold the said items on 30.03.2010 to M.R. Traders. To avail exemption under the notification, ATSPL filed the prescribed declaration dated 30.03.2010 and intimation regarding commencement of production was also filed on 30.03.2010 in the office of the Assistant Commissioner of Central Excise. However, ATSPL withdrew the application claiming exemption, by a letter dated 06.04.2010. A letter dated 08.04.2010 was also submitted by the Manager of ATSPL to the Superintendent mentioning therein that due to some unavoidable circumstances it was not availing the exemption. In the said letter, reference was also made to the earlier letter dated 06.04.2010 submitted by ATSPL to the Deputy Commissioner for cancellation of the declaration. Subsequently ATSPL obtained Central Excise registration on 04.06.2010 and started paying duty on the goods manufactured. 5. The Central Board of Excise and Customs [CBEC] sent a letter dated 17.03.2008 to the Chief Commissioner of Central Excise, Meerut clarifying the meaning of 'first clearance' with the reference to the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after the cut-off date and during the exemption period of ten years as per the notification. Therefore, it is clarified that in all the above situations, the benefit of the excise duty exemption under the notifications would continue to be available to eligible industrial units. However the period of exemption would remain ten years and would not get extended on account of such modifications or additions under any circumstances." 7. The Tax Research Unit of the Department of Revenue also clarified by a letter dated 26.04.2012 that an eligible unit can exercise option even after the sunset clause for the purpose of availing benefit of the exemption under notification as sunset clause was relevant only for eligibility. The relevant portion of the communication is reproduced below:- "2. The matter has been examined. According to the condition of the notification, the manufacturer who intends to avail of the exemption shall exercise his option in writing before effecting first clearances and such option shall be effective from the date of its exercise. Although the units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxxx 13. That simultaneously upon execution of the Deed of Sale/Transfer, the Assignor shall handover vacant and peaceful possession of the said Industrial property to the Assignee along with all the title documents in original thereto including the permissions, licenses, drawings etc. xxxxxxxxxxx 15. That at the time of execution of Deed of Sale/Transfer, the Assignor shall sign all requisite Applications, forms etc. for the effective transfer of the said Industrial property in favor of the Assignee along with the Transfer of Electricity, Water, Sewage & other service connections along with the Security Deposits made thereto by the Assignor in favor of the concerned Department/Agencies. The Assignor shall render all the necessary assistance for the Transfer of the connections referred herein. xxxxxxxxxxxx 19. That both the parties shall be bound by the terms and conditions of this Agreement to Sell and shall comply with the same in letter and spirit." 9. Thereafter, ATSPL submitted a letter dated 06.04.2013 to the Assistant Commissioner mentioning that it had commenced commercial production on 30.03.2010 and was, therefore, eligible to file the declaration for availing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an appeal before the Commissioner (Appeals) and by an order dated 25.04.2016 the appeal was dismissed. The relevant portion of the order of the Commissioner (Appeals) is reproduced below:- "Thus, from the above discussed case laws, it is quite evident that the benefit of Notification No. 50/2003-CE dated 10.06.2003 is available only when declaration, as prescribed, is filed before effecting first clearance and since in this case after signing of Memorandum of Undertaking on date 01.03.2013 the appellant filed a letter dated 06.02.2015 after nearly 23 months, hence I find that the appellant has filed to fulfill the conditions as laid down vide CBEC Circular No. 960/03/2012-CX.3 dated 17.02.2012. Further when the original owner had given up his claim for exemption in 2010 itself, the new owner cannot after 3 years lay claim to that exemption without fulfilling any of the essential conditions stipulated in the relevant Notifications." (emphasis supplied) 15. Feeling aggrieved, the appellant filed Excise Appeal No. 52501 of 2016 before the Tribunal. The Tribunal allowed the appeal by the order dated 04.01.2018. The matter was remanded to the original authority for a fresh dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacturing unit during the applicable period of notification. The main grievance of the appellant is that they have given due intimation on 27/08/2013 to avail area based exemption and thereafter continued to file regular quarterly returns claiming such exemption. It is submitted that the Revenue recording wrong facts of date of Intimation under the notification denied the concession to them. 3. The learned AR contesting the appeal submitted that when the appellants have taken over the manufacturing unit on 01/03/2013 itself in terms of MoU, the intimation to avail area based exemption should have been filed immediately. Further, there is no merit in the claim of the appellant that they can opt for exemption any time in the financial year. The scheme is to be operated for the whole financial year and there is no provision for opting in or opting out in the middle of the financial year. Regarding intimation given by the appellant, the learned AR submitted that the lower authorities clearly recorded that the said intimation is given only on 6/02/2015. As such, the applicability of area based exemption, if any, will not arise prior to such intimation. The requirement to file in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 06.06.2017 to the appellant for the period from July 2013 to December 2016 to show cause as to why the exemption claimed under the exemption notification should not be denied and Central Excise duty amounting to Rs. 2,51,52,996/- should not be demanded with interest and penalty. The appellant submitted a reply but this show cause notice adjudicated upon by the Commissioner by order dated 28.03.2018. The benefit of the exemption notification was denied and the demand proposed in the show cause notice was confirmed. It is against this order dated 28.03.2018 passed by the Commissioner that the appellant has filed Excise Appeal No. 51926 of 2018. 17. The Assistant Commissioner also issued a show cause notice dated 21.03.2018 to the appellant proposing a demand of Central Excise duty of Rs. 31,16,508/- with interest and penalty for the period January, 2017 to March 2017. This show cause notice was adjudicated by the Assistant Commissioner by order dated 23.10.2019 confirming the demand proposed in the show cause notice. This order dated 23.10.2019 passed by the Assistant Commissioner was assailed by the appellant before the Commissioner (Appeals) by filing Appeal Number 79 of 2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs recorded by the Commissioner (Appeals) in the order dated 23.03.2021 are as follows: "7.4. This has an immediate consequence that the 'unit', that they had taken over in 2013 is no longer a 'unit' that was availing the benefit of the exemption notification No. 50/2003-CE dated 10.06.2003, as the very act of trying to claim that benefit vide its letter dated 30.3.2010 had become null and void vide their own letter dated 8.4.2010 in fact, they were duly paying duty thereafter. 8. However, I also find that M/s ATSPL were manufacturing completely different products and the appellant after its takeover in 2013 was manufacturing completely different products which requires different kind of plant and machinery. As such, on this score too, they have not taken over the same 'unit' which was being run by M/s ATSPL. What they have actually taken over is merely the land and physical premises as elaborately discussed in the Order-in-Original dated 17.09.2019." xxxxxxxxxxx 9. I further observe that the appellant has repeatedly tried to assert that the Order-in-Original has gone beyond the directions of CESTAT while remanding the matter. I find that in view of the false stand taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph 7 and submitted that since the impugned order was set aside and the matter was remanded to the original authority for a fresh decision, the original authority was justified in examining the issues regarding exemption under the notification claimed by the appellant in its entirety rather than restricting it to only the determination of the date of filing of the intimation to the Department by the appellant. 23. The Tribunal, in its decision dated 04.01.2018, noted that though ATSPL had, after signing of MoU on 01/03/2013 sent a communication dated 06.09.2013 to the Assistant Commissioner for availing the area based exemption w.e.f. 22.04.2013 but the appellant had also, after execution of the sale deed on 14.08.2013 and taking of the possession, submitted the option in writing/declaration to the Assistant Commissioner on 27.08.2013 apprising him about the taking over of the unit from ATSPL and its intention to continue the area based exemption which was admissible to ATSPL till 20.03.2020. The Tribunal also noticed the contention advanced on behalf of the appellant that due intimation had been given to the Assistant Commissioner on 27.08.2013 to avail area based exemption. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to a conclusion that the appellant was not entitled to the benefit of the notification, instead of restricting his decision only on the issue as to whether the intimation was given by the appellant on 27.08.2013 or on 06.02.2015 for availing the benefit of the notification. 28. In this connection reference can be made to a Larger Bench decision of the Tribunal consisting of five Members in HI-Tech Arai Ltd. v/s Commissioner of Central Excise, Madurai [[2008] taxmann.com 1384 (Chennai-CESTAT)]. The Tribunal observed that when the remand order specifically states the issue to be decided, the lower authority cannot travel beyond the scope and entertain new pleas. The relevant potion of order of the Tribunal is reproduced below:- "4. After giving careful consideration to the submissions, we note that, in the present case, this Tribunal had remanded the classification dispute to the original authority for de novo consideration. We have already reproduced the operative paragraph of the remand order. It is abundantly clear from the remand order that what was remanded was a classification dispute viz Heading 84.09 Vs. Heading 87.14/85.03. The third entry viz. Heading 84.79 was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the terms of the notification and the Circular. 32. The Commissioner (Appeals) has held that the 'unit' which the appellant had taken over in 2013 is not the 'unit' that was intending to avail the benefit of the exemption notification because initially ATSPL had claimed the benefit of the notification by a letter dated 30.03.2010, but it had subsequently expressed its unwillingness to claim exemption by a letter dated 08.04.2010 and in fact paid excise duty thereafter. The Commissioner (Appeals) also noticed that ATSPL was manufacturing different products than the products manufactured by the appellant after purchase in 2013. Thus also, according to the Commissioner (Appeals), it is not same 'unit' that was taken over by the appellant. In fact, the Commissioner (Appeals) also held that the appellant had taken over merely the land and physical premises of ATSPL. 33. The aforesaid findings recorded by the Commissioner (Appeals) run contrary to the provisions of exemption notification as also the Circular dated 22.10.2010 issued by CBEC. The exemption under the notification is qua the unit and an eligible unit can add new products, new plant and machinery and can also transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption notification at all. However, we find that this very point had been considered by the Board and the Board vide Circular No. 332/23/11-TRU dated 26/4/12 has clarified as under:- xxxxxxxxx In view of the above Circular of the Board, we hold that the basis for denying the exemption on the ground that the declaration was filed after 31/3/2010, is not correct." 35. The Commissioner (Appeals) also ignored the submission advanced on behalf of the appellant that the order passed by the Assistant Commissioner went beyond the remand order merely for the reason that the appellant had stated that they were not aware of the letter dated 08.04.2010. This statement, according to the Commissioner (Appeals), meant that the appellant committed perjury which made it permissible for the Assistant Commissioner to examine all the issues for coming to a conclusion as to whether the appellant was entitled to exemption under the notification. 36. The Commissioner (Appeals) could not have ignored the directions issued by the Tribunal to the adjudicating authority to examine only the limited issue regarding date on which the appellant had filed the declaration for claiming the benefit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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