Order Date – 31 January 2023

Parties: M/s Special Cables Pvt Ltd Vs Central Board of Indirect Taxes and Customs & ORS

Facts –

• The Petitioner, M/s Special Cables Pvt Ltd, was entitled to Area Based Exemption from Central Excise in terms of the Notification No.50/2003-CE dated 10.06.2003 from the date of commencement of production at its unit in Rudrapur, Uttarakhand till 01.07.2017.
• The respondents have denied the budgetary support under the Scheme to the petitioner on the ground that it did not fulfil the criteria of an ‘Eligible unit’ under the Scheme as it was not availing the Area Based Exemption under the Notification.

Issue –

• Whether the petitioner is entitled to Area Based Exemption in terms of the Notification No.50/2003-CE dated 10.06.2003?

Order –

• The Hon’ble High Court observed that Scheme indicates that for a unit to qualify as an eligible unit’, it is required to satisfy two conditions.  First that it was eligible before first date of July 2017 to avail the benefit of ab initio exemption or exemption by a refund for payment of central excise duty in terms of notification as specified in paragraph 2 of the Scheme.  And, second, that the unit was availing such exemption immediately before 01.07.2017. In the present case, there is no dispute that the petitioner was eligible to avail the benefits of the Notification (Notification No.50/2003-CE dated 10.06.2003), which was one of the Notifications as mentioned in paragraph 2 of the Scheme.   
• It was held that that the second limb of the condition of exemption is that the unit must be availing the benefit of the Notifications as mentioned in paragraph 2 of the Scheme immediately prior to 01.07.2017. The petitioner was denied the benefit at the material time, cannot be read to mean that the petitioner was not availing the same. Thus there is no other reason for denying the petitioner’s claim for budgetary support under the Scheme.
• The Court directed the respondents to release the budgetary support amount as assessed to the petitioner in terms of the Scheme and to grant registration to the petitioner to enable it to file online claims as prayed for by the petitioner.
• The Appeal is allowed.