2012 (11) TMI 725 - HC - Central Excise

Exemption notification No. 2/2001, dated 27-1-2001 The petitioner-manufacturer of excisable goods has filed this petition primarily praying for a direction to the State Government for issuing certificate showing that petitioner has manufactured goods namely, Tarpaulin for relief and rehabilitation work in earthquake affected areas in Gujarat through approved agency. - Held that - Primarily stand of the Government is that the petitioner failed to demonstrate that Tarpaulin manufactured was donated by the petitioner. It is the case of the petitioner that such Tarpaulin was purchased by the agricultural department and thereafter in turn supplied to the earthquake affected people. According to the department, this would not fulfill the requirement of exemption notification. - Respondents District Magistrate, Palanpur, is directed to examine the factual aspects

Summary

Issues:
Petitioner's request for a certificate to avail exemption from excise duty under Notification No. 2/2001 for manufacturing Tarpaulin for earthquake relief work.

Analysis:

The petitioner, a manufacturer of excisable goods, filed a petition seeking a direction from the State Government to issue a certificate confirming the production of Tarpaulin for earthquake relief work in Gujarat through an approved agency. The petitioner intended to avail exemption from excise duty under Exemption Notification No. 2/2001. However, the District Magistrate refused to issue the required certificate, leading to the petitioner's appeal pending before the appellate authority against the duty demand raised by the Excise Department in the absence of the certificate.

The State Government contended that the petitioner failed to demonstrate that the Tarpaulin manufactured was indeed donated, as claimed by the petitioner. The government argued that the goods were purchased by the agricultural department and then supplied to the earthquake-affected individuals, which, according to them, did not meet the criteria for exemption under the notification.

The High Court found the State Authority's approach unjustified, emphasizing that the District Magistrate's role was to verify whether the goods supplied by the petitioner were indeed donated for the earthquake-affected persons. The Court clarified that the interpretation and implementation of the Exemption Notification fell under the purview of the Excise Department, not the District Magistrate. The Court highlighted that the crucial aspect was whether the goods were donated for the use of the affected persons, rather than the manufacturer being the donor.

Consequently, the Court directed the respondent District Magistrate to reexamine the factual aspects and issue the necessary certificate to the petitioner within four weeks. The interim relief granted earlier was to continue until the District Magistrate's decision. The petition was disposed of, with the rule made absolute to the extent mentioned in the judgment.