Wipro Enterprises Pvt. Ltd Vs Commissioner (CESTAT Chandigarh)
Held that duty exemption benefit under notification no. 50/2003-CE dated 10.06.2003 cannot be denied because of a diversification of production capacity by adding new machines.
Facts-
M/s. Wipro Enterprises Pvt. Ltd. (Unit-II) has filed this appeal to assail the order dated 03.02.2021 by which the Commissioner, CGST, Commissionerate, Shimla has held that the appellant is not eligible to avail benefit of exemption from duty under notification no. 50/2003-CE dated 10.06.2003 in respect of new products which were manufactured/added by the appellant after the cut-off date i.e. 31.03.2010. The Commissioner has, accordingly, confirmed the demand of Rs. 6,28,16,499/- against the appellant under section 11A(1) of the Central Excise Act, 1944 and ordered for its recovery with interest and penalty.
Conclusion-
The appellant had not set up a new Unit and there was only a diversification of production capacity by adding new machines. The old products were continued to be manufactured, in addition to the new products. The fact that the investment for the new products was very large and the percentage of production of the new product was also very large cannot be made a ground to deny the benefit of the Exemption Notification dated 10.06.2003 to the appellant.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
M/s. Wipro Enterprises Pvt. Ltd. (Unit-II)1 has filed this appeal to assail the order dated 03.02.2021 by which the Commissioner, CGST, Commissionerate, Shimla2 has held that the appellant is not eligible to avail benefit of exemption from duty under Notification No. 50/2003-CE dated 10.06.2003 3 in respect of new products which were manufactured/added by the appellant after the cut-off date i.e. 31.03.2010. The Commissioner has, accordingly, confirmed the demand of Rs. 6,28,16,499/- against the appellant under section 11A(1) of the Central Excise Act, 19444 and ordered for its recovery with interest and penalty.
2. Jayaz Electrical Motors filed a declaration dated 24.12.2008 under the aforesaid area based Exemption Notification dated 10.06.2003 for manufacture of electrical motors, torch, LED products, liquid detergent and toilet soap 5 stating that the commercial production had commenced on 02.12.2009. The appellant purchased Jayaz Electrical Motors on a slump sale basis and intimated this fact to the Department by a letter dated 31.03.2014. The appellant also stated that it will continue to avail exemption as per Exemption Notification. By a letter dated 24.03.2015, the appellant intimated the Department that the Unit was shifted from Khasra No. 85/4, Plot No. 5, Crestal Complex, EPIP Jharmajri, Baddi to Plot No. 87-A, EPIP Phase-I, Jharmajri, Baddi. The appellant started manufacturing certain other products namely, body wash, deo, face wash, glucovita bolts, hand and body lotion, liquid hand wash, shaving cream, talcum powder, fabric conditioner, MCB, socket, panel and switch 6 and intimated this fact to the Department by letters dated 12.08.2016, 30.03.2017 and 18.01.2018.
3. The dates on which the appellant started manufacturing new products are as follows:
