IMPORTANT POINT
The establishment of a new industrial unit, even on the same site, qualifies for tax exemption under Notification No. 20/2007-CE, as affirmed by multiple statutory authorities.

JUDGMENT :

Vijay Bishnoi, C.J.

1. Heard Mr. S.C. Keyal, learned Standing counsel, CGST, appearing for the appellant. Also heard Mr. A. Kanodia, learned counsel appearing for the respondent.

2. This Appeal under Section 35G of the Central Excise Act, 1944 is preferred by the Department of Revenue being aggrieved with the final order dated 15th June, 2023 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, in Excise Appeal No. 670/2012.

3. With the consent of the parties, the matter has been heard finally at the admission stage.

4. After hearing the learned counsel for the Revenue, this Court, vide order dated 08.12.2023, framed the following substantial questions of law :

“A. Whether Hon’ble CESTAT has erred in law in holding that obtaining fresh license by the respondent after ban was lifted by the Hon’ble Supreme Court on the basis of the report of the High Power Committee amounts to establishment of new industry and entitled to benefit of Notification dated 25.04.2007.

B. Whether the findings of the LD Tribunal is perverse in holding the newly established industry, whereas admittedly ‘M/s Sarda Plywood Industries Ltd, Jeypore is an old wood-based plywood industry, functioning at Jeypore prior to the ban imposed by the Apex Court.”

5. On a subsequent date, the learned counsel appearing for the sole respondent put in appearance and submitted that this Court vide order dated 08.12.2023 had framed substantial questions of law without providing any opportunity of hearing to the respondent and even without issuing notice to the respondent. It was argued on behalf of the respondent that whether the respondent industrial unit is a new industry or an old one is purely a question of fact and since as many as three statutory authorities have already decided the issue against the Revenue while recording a specific finding of fact that the respondent unit is a new industry, it is clear that no substantial question of law is involved in this appeal.

6. The brief facts of the case are that on 29.12.2009, the respondent, which is an industrial unit, moved an application before the authority concerned for availing the benefit of tax exemption under the Notification No. 20/2007-CE dated 25.04.2010, as amended. The Assistant Commissioner of Central Excise and Service Tax, Dibrugarh, decided the said application vide order dated 21.04.2010 while holding that the respondent unit is eligible to avail the benefit of exemption under the said notification, but refused to grant the benefit of exemption to the respondent on the ground that sufficient CENVAT credit was available to the respondent unit on the first day of the month under consideration for payment of duty on goods. While passing the order dated 21.04.2010, the Assistant Commissioner recorded a fining to the effect that the respondent unit is a new industrial unit. The relevant observations made by the Assistant Commissioner and the reasons cited for not allowing the benefit of exemption to the respondent unit under the Notification dated 25.04.2007, are reproduced hereunder :

“2. All the documents have been forwarded to the Superintendent, Central Excise Naharkatia-I Range (hereinafter called the Range Officer) for verification report. The Range Officer vide his letter dated 12/03/2010 submitted his verification report whereunder he stated, inter alia that he visited the factory of the assessee and verified the documents with the original copies provided by the assessee and found in order. The Range Officer also stated that he verified the Ground Plan with the original copy duly approved by the Chief Inspector of Factories and found in order. He further stated that the unit of the assessee started their first commercial production from 14/10/2009 as recoded in the DSA Register and their first clearance was effected on 09/11/2009 vide Central Excise Invoice No.001 dated 09/11/2009. The Range Officer has stated that he conducted the physical check of the plants and mach