2009 (1) TMI 627 - AT - Central Excise

Summary

Issues involved: Exemption eligibility u/s Notification No. 198/87 C.E., duty demand confirmation, penalties imposition, validity of certificates, assistance by KVIC, rural area eligibility determination.

Exemption Eligibility u/s Notification No. 198/87 C.E.: The appellant, engaged in manufacturing furniture as a registered public trust, faced duty demand and penalties due to alleged ineligibility for exemption under Notification No. 198/87 C.E. The issue revolved around the requirement of a certificate from KVIC and whether the goods were genuinely village industry products marketed with KVIC's assistance.

Validity of Certificates and Assistance by KVIC: The appellant contended that their fresh KVIC certificate, along with the State Board's registration, entitled them to exemption. They argued that KVIC's clarification supported their eligibility as a village industry, despite high-quality products. The appellant emphasized KVIC's role in determining village industry status and disputed Revenue's claim of no assistance received.

Rural Area Eligibility Determination: The appellant challenged the Commissioner's decision on rural area location, asserting KVIC's authority in certifying village industry status. The appellant cited precedents emphasizing KVIC's certification acceptance and opposed Revenue's independent eligibility assessment.

Judgment: The Tribunal upheld the appellant's eligibility for exemption under Notification No. 198/87 C.E., emphasizing the requirement of a KVIC certificate and rejecting Revenue's independent assessment. The Tribunal considered KVIC's clarification, supporting the appellant's village industry status, and cited precedents to affirm the primacy of KVIC's certification. The Tribunal ruled in favor of the appellants, granting them exemption and relief from duty demand and penalties.