Tripura High Court
Union Of India vs Vrs on 6 September, 2021
Page - 1 of 4
HIGH COURT OF TRIPURA
AGARTALA
Central Ex. App. No. 1 of 2020
Union of India,
Represented by the Commissioner of CGST, Agartala.
............... Appellant(s).
Vrs.
M/s. Dharampal Satyapal Ltd.
Industrial Estate Shed No.-14, Arundhutinagar,
Agartala, Tripura-799003.
............ Respondent(s).
BEFORE
HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI
HON'BLE MR. JUSTICE S. G. CHATTOPADHYAY
For Appellant(s) : Mr. Paramartha Datta, Advocate.
For Respondent(s) : Mr. A. K. Saraf, Sr. Advocate.
Mr. Kousik Roy, Advocate.
Date of hearing and
Judgment & Order : 6th September, 2021.
Whether fit for reporting : NO.
JUDGMENT AND ORDER(Oral)
(Akil Kureshi, CJ)
This appeal is filed by the department to challenge the judgment of
Customs, Excise and Service Tax Appellate Tribunal (CESTAT for short) dated
20.11.2019. Following substantial question of law is framed for our
consideration:
"Whether the Tribunal was right in law in coming to
the conclusion that the Sheds No.15 and 36D of the
respondent assessee were part of the existing
manufacturing unit and therefore, even though the
manufacturing activities at such sheds commenced
after 28.02.2001, the production at the said Sheds was
eligible for exemption under notification No. 69/2003-
CE dated 25.08.2003."
Page - 2 of 4
[2] Brief facts are as under:
The respondent assessee had an existing manufacturing unit at
shed no. 14, industrial estate A. D. Nagar, Agartala from where the assessee
would manufacture chewing tobacco under the brand name 'Toofani Zarda
Silver'. This industrial unit fulfilled all the eligibility conditions for exemption
under exemption notification dated 25.08.2003. In this notification, one of the
conditions of eligibility was that the industrial unit should have commenced
commercial production on or after 24.12.1997 but not later than 28.02.2001.
[3] The assessee acquired two more sheds in the same industrial
estate, Sheds No.15 and 36D after the said date of 28.02.2001 and after
completing necessary formalities with the Central Excise Department started
manufacturing activity of the same product at the said sheds sometime thereafter.
The assessee claimed exemption from payment of duty in respect of his entire
manufacturing capacity i.e. from the pre-existing sheds as well as the
manufacturing activity which was carried out at the newly added sheds No.15
and 36D. The department objected to the claim of exemption put forth by the
assessee. After issuance of show cause notice, the Assessing Officer passed the
order in original on 23.11.2007 and demanded unpaid duty with penalty and
interest. In these proceedings, the assessee had contended that the new sheds are
nothing but in the nature of expansion of the existing manufacturing activity of
assessee and cannot be treated as new units for manufacturing the same product.
The assessee contended that all the criteria for holding the additional sheds
forming part of the existing unit are satisfied in the present case. Ignoring such
pleas of the assessee, the Assessing Officer had passed the order in original.
Page - 3 of 4
[4] Aggrieved by the order in original, the assessee approached the
Tribunal. The Tribunal by the impugned judgment allowed the appeal and
deleted the demands. It was observed that undisputedly there was common
registration for the industrial sheds granted by the department. It was thereafter
not open to the department to argue that the new sheds do not form part of the
existing unit. Against this judgment the department has preferred this appeal.
[5] Learned counsel, Sri Paramartha Datta submitted that the new
units came into existence after the cut-off date of 28.02.2001. Any production of
chewing tobacco from such units after the said date would not qualify for
exemption.
[6] On the other hand, learned Sr. counsel Sri A.K. Saraf for the
assessee opposed the appeal submitting that the Tribunal has come to factual
findings. No question of law arises. All the requirements of the additional sheds
forming part of the existing unit were satisfied. He drew our attention to the
affidavit filed in this appeal, in which relevant facts have been highlighted. It is
pointed out that there was inter linking of the manufacturing process, raw
materials were commonly procured for all the sheds, there was common work
force maintained by the assessee for all sheds, there was common sales tax
registration and common income tax assessments for all industrial sheds.
[7] In the present case, the department is not in a position to dispute
the factual assertions of the assessee that there was inter linking of a
manufacturing process between all sheds, the raw material was procured
commonly, that the labour and work force were also commonly maintained. All
Page - 4 of 4
sheds were under the controlled of the same management and the sheds were
under common registration of the factory. It is also pointed out that the sheds
No.15 and 36D were adjacent to and inter connected with the existing
manufacturing unit located at shed No.14.
[8] In view of such overwhelming evidence, in our opinion that
Tribunal committed no error in coming to the conclusion that the addition of two
sheds to the existing manufacturing unit was only in the nature of expansion of
manufacturing capacity and cannot be seen as establishment of new industrial
units coming into existence after 28.02.2001. It is not the case of the department
that even if there is any expansion in the existing industrial unit after 28.02.2001,
the production achieved through such augmented manufacturing capacity would
not qualify for exemption under the said notification dated 25.08.2003.
[9] In the result, the question is answered in favour of the assessee
against the Department. Appeal is dismissed. Pending application(s), if any,
also stands disposed of.
(S. G. CHATTOPADHYAY),J. (AKIL KURESHI),CJ.
Dipankar
