Order date – 23 August 2022

Facts – 

• The appellant, M/s Wipro Enterprises Pvt Ltd., purchased Jayaz Electrical Motors on a slump sale basis and intimated this fact to the Department by a letter dated 31.03.2014
• Jayaz Electrical Motors filed a declaration dated 24.12.2008 under the Notification No. 50/2003-CE dated 10.06.2003 for manufacture of electrical motors, torch, LED products, liquid detergent and toilet soap and the appellant intended to continue avail it.
• The appellant started manufacturing certain other products and intimated this fact to the Department by letters dated 12.08.2016, 30.03.2017 and 18.01.2018.
• The Department issued a show cause notice dated 16.10.2018 and proposed to deny the benefit of Exemption Notification on new products on the ground that the appellant started manufacturing these products after 31.03.2010. It was also alleged that the appellant started a new Unit for manufacturing new products and the benefit of Exemption Notification was not available on such new products.
• The demand of Rs. 6,28,16,499/- against the appellant under section 11A(1) of the Central Excise Act, 1944 was confirmed and ordered for its recovery with interest and penalty.
• Aggrieved the appellant filed an appeal.

Issue – 

• Whether the appellant was entitled for exemption on the new products manufactured through the new plant machinery?

Order – 

• The Tribunal observed that 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. 
• Also, 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.
• They also held that in the present case, neither there was a charge in the show cause notice nor there is a finding in the impugned order that the old products and the new products had separate manpower or finances. It has, therefore, to be considered as a single Unit.
• Hence, the appeal was allowed and order was set aside.