M/S.Digitech Technology vs Cce, Chandigarh

(Arising out of OIA No.CHD-EXCUS-000-APP-168-14-15 dt.6.6.14 passed by the CCE (Appeals), Chandigarh)

Date of Hearing/Decision: 31.03.2015

For approval and signature:

Honble Mr.Rakesh Kumar, Member (Technical)

Honble Mr.S.K.Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s.Digitech Technology Appellant

Vs

CCE, Chandigarh Respondent

Present for the Appellant: Shri R.K.Philip, Advocate

Present for the Respondent: Shri R.k.Grover, AR

Coram: HonbleMr.Rakesh Kumar, Member (Technical)

HonbleMr.S.K.Mohanty, Member (Judicial)

FINAL ORDER NO.51426/2015

PER: RAKESH KUMAR

The appellant in their manufacturing unit located at Parwanoo, District Solan, Himachal Pradesh manufacture LED Lanterns chargeable to central excise duty under heading 8513 of the Central Excise Tariff. Their unit it located at Khasra No.632-633, Plot No.7A, 2nd Floor, Gabriel Road, Sector-2, Parwanoo, District Solan, Himachal Pradesh. The appellant company wanted to avail duty exemption under Notification NO.50/03-CE dt.10.6.03 in respect of this unit and accordingly, filed the necessary declaration to the Assistant Commissioner on 27.03.10. According to the appellant, their unit started manufacturing operation on 30.3.2010.

1.1 Since the area available at Khasra No.632-633, Plot No.7A, 2nd Floor, Gabriel Road, Sector-2, Parwanoo, District Solan, Himachal Pradesh was small and the appellant required more space for expansion of its business, the appellant on 2/7/2010 intimated the Assistant Commissioner, Shimla about shifting of their factory to Khasra No.15/1, Plot No.105-C, Industrial Area, Sector-1, Parwanoo, District Solan, Himachal Pradesh. On 9.7.2010, the jurisdictional Superintendent of Central Excise wrote to the appellant seeking certain information and documents, namely - copy of letter dt.2.7.10 submitted to Assistant Commissioner, Simla, for shifting of factory to new premises, attested copy of site plan, copy of rent deed, stock position as on the date of shifting, certificate of connection of electricity and load at new premises, details of labour, certificate of revenue authorities, certificate of DIC regarding registration of new premises, certificate of chartered engineer regarding verification of plant & machinery at the new premises alongwith details thereof, and also confirm whether there is any addition in the plant & machinery and whether it has resulted into any enhancement of capacity of production. The appellant submitted the required information to the superintendent under their letter dated 4.8.2010 under which they enclosed rent deed with the owner of the premises and NOC from the pollution control department. Besides this, other information sought in the letter dt.9/7/10 of the Superintendent was also furnished.

1.2 The department was of the view that as no production was undertaken by the appellant at new address on or before 31.3.10, they would not be eligible for the exemption issued a show cause notice dt.1.8.11 for denial of exemption and also for demand of duty amounting to Rs.11,80,000/- from them alongwith interest on it for the period from August, 10 to December, 11 and also for imposition of penalty under Rule 25. Subsequently another show cause notice dt.7.5.12 was issued for duty demand from the appellant amounting to Rs.38,75,003/- for the period April, 11 to December, 11 alongwith interest under section 11AB also for imposition of penalty under rule 25.

1.3 Both the SCNs were adjudicated by the Joint Commissioner by a common Order-in-Original dt.30.1.13, by which, the above mentioned duty demands of Rs.11,80,000/- and Rs.38,75,000/- were confirmed against the appellant alongwith interest under section 11AB and penalty of equal amount was imposed under Rule 25 of Central Excise rules, 2002. On appeal being filed by the appellant against the order of the Joint Commissioner, the Commissioner (Appeals) has upheld the order of the Joint Commissioner. Against this order of CCE (Appeals), this appeal has been filed.

2. Heard both sides.

3. Shri R.k.Phillips, Advocate, the learned Counsel for the appellant, pleaded that the appellant unit had commenced commercial production before 31.3.10 at its old location at Khasra No.632-633, Plot No.7A, 2nd Floor, Gabriel Road, Sector-2, Parwanoo, District Solan, Himachal Pradesh, that the necessary declaration in this regard for availing the exemption under Notification No.50/03-CE dt. 10.6.03 has been filed to the jurisdictional Assistant Commissioner, Shimla on 27.3.10, that subsequent to filing of declaration, there was no query from the department, that the appellant carried out manufacturing in this manufacturing unit during the period from March,10 to June, 10; that the appellant also filed Form-A return to the jurisdictional Assistant Commissioner, with a copy to the Range Superintendent wherein the details of the goods manufactured and sold during April, 10 to June, 10 have been declared, that since the space of the premises at Khasra No.632-633, Plot No.7A, 2nd Floor, Gabriel Road, Sector-2, Parwanoo, was not sufficient for their manufacturing activity, the appellant shifted their manufacturing unit in July, 10 to new location at Khasra No.15/1, Plot No.105-C, Industrial Area, Sector-1, Parwanoo, District Solan, Himachal Pradesh, that in this regard, under their letter dated 2.7.10, the appellant intimated to the jurisdictional central excise authorities, that the jurisdictional Superintendent, Central Excise, vide its letter dated 9.7.10 sough certain information and certain documents including certificate issued by DIC regarding registration of new premises, certificate of chartered engineer regarding verification of plant & machinery at the new premises alongwith details thereof, and the information whether there is any addition in the plant & machinery and whether it has resulted in any enhancement of capacity of production., stock position on the date of shifting, and all the information and the documents sought have been furnished, that the shifting of the factory to Khasra No.15/1, Plot No.105-C, Industrial Area, Sector-1, Parwanoo, District Solan, Himachal Pradesh in July, 2010, was also intimated to Disctrict Industries Centre they have informed that change of address has been taken on their record, that chartered engineer after visiting the factory of the appellant has given the certificate regarding details of machinery and manufacturing process, and the installed capacity to manufacture LED lanterns; that absolutely no enquiry was conducted by the department in support of the allegation, that this is not the case of shifting of factory from the old location to a new location; that the appellant had commenced commercial production prior 31/3/10, and therefore, the benefit of exemption Notification No.50/03-CE cannot be denied, and in this regard, just because they shifted their factory in July, 2010 to an new location, they cannot be treated as having commenced commercial production after 31/3/10, that even in terms of Boards circular dated 17.2.12, the appellant would be eligible for exemption as shifting of unit is certified by the chartered engineer, and that in view of this, the impugned order is not sustainable.

4. Shri R.K.Grover, ld.DR defended the impugned order by reiterating the findings of the Commissioner (Appeals) in the impugned order.

5. We have considered the submissions made from both sides and perused the records.

6. The appellant manufacture LED lanterns chargeable to central excise duty under chapter 85 of the Tariff. There is no dispute that earlier their unit was located at Khasra No.632-633, Plot No.7A, 2nd Floor, Gabriel Road, Sector-2, Parwanoo, District Solan, Himachal Pradesh and this khasra no. is notified under Notification No.50/03-CE. According to the appellant, they have commenced commercial production on 30.3.10 and had filed the declaration for availing the exemption under Notification No.50/03-CE on 27/03/10 to the jurisdictional Assistant Commissioner Central Excise. This claim of the appellant is not disputed by the department. It is also seen that the appellant have filed declaration regarding quantum of production in form A under Rule 12 of Central Excise Rules, 2002 for the period from April, 10 to July, 10 giving the details of quantum of goods manufactured and cleared by them. The appellant shifted to new location at Khasra No.15/1, Plot No.105-C, Industrial Area, Sector-1, Parwanoo, District Solan, Himachal Pradesh and in this regard, they submitted necessary information to the department on 2.7.10.

The department in pursuance to this intimation, sought certain information from the appellant under its letter dt.9.7.10, the information and documents sought by the department were  (a) copy of letter dt.2.7.10 submitted to Assistant Commissioner, Shimla, regarding for shifting of business to new premises, duly attested copy of site plan, (b) attested copy of rent deed with the owner of new premises alongwith the area of the factory, (c) NOC from pollution control board for new premises, (d) memorandum and article of Association/certificate of incorporation by Registrar of Firms alongwith resolution for setting up/shifting to new premises, (e), transport documents relating to the shifting of plants and machinery to new premises, (f) stock position as on date of shifting, (g) certificate of connection of electricity and load at new premises, (h) details of labour, certificate of revenue authorities showing khasra no. and Hadbast No. of new premises, (i) certificate of DIC regarding registration of new premises, (k) certificate of chartered engineer regarding verification of plant & machinery at the new premises alongwith details thereof, Besides this, this letter also asked the appellant to confirm whether there is any addition in the plant & machinery and whether it has resulted into any enhancement of capacity of production.

There is no dispute that the above information was submitted by the appellant to the superintendent under their letter dated 4.8.2010 under which they enclosed rent deed with the owner of the premises and NOC from the pollution control department. Besides this, other information sought in the letter of the Superintendent was also furnished. It is seen that change of address has been intimated to district industries centre and district industries centre confirmed the change of address. When the information submitted by the appellant in respect of departments letter dt.9.7.10, and the documents furnished by the appellant are not disputed, chartered engineers certificate has certified the existence of machinery and plant at the new premises and also the installed capacity, in our view, there is absolutely no ground to treat the appellant unit as having commenced their commercial production in July, 2010 and deny the exemption on this basis. Even in terms of Boards circular dated 17.2.12, an eligible unit physically shifting to new location would be eligible for exemption under Notification No.50/03-CE for residual period of exemption.

When the department does not dispute that the appellant had commenced commercial production with effect from 30.3.10 from their old unit and has accepted their Form A return for period from April, 2010 to June, 2010 wherein certain production of LED lanterns has been declared, when the district industries centre has confirmed the shifting of factory to the new location and when the installation of plan and machinery at the new premises has been certified by chartered engineer and besides this, there is evidence of transportation of machinery to the new location, in our view, there is no justification to treat the appellant unit as having commenced commercial production after 31/3/10 and denying the exemption on this basis. Therefore, the impugned order is not sustainable. The same is set aside. The appeal is allowed.

(Pronounced in the open court)

(S.K.MOHANTY) (RAKESH KUMAR)

MEMBER (JUDICIAL) MEMBER (TECHNICAL)

mk

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