2016 (3) TMI 94 - AT - Central Excise

Admissibility of concessional rate of duty under Notification No. 9/2001- C.E., dated 1-3-2001 and Notification No. 9/2003 C.E., dated 1-3-2003 - whether village Atun in which the factory premises of appellants is situated falls in rural area or urban area for admissibility of concessional rate of duty? - Held that - There is nothing in the order which states that village Atun is notified as an urban area. The order only gives a direction to the authority to conduct a civic survey for preparation of a master plan. The appellants do not have a case that master plan has been prepared including Atun in urban area. It is crystal clear that the original authority had wrongly interpreted the order dated 3-7-1981 as an order notifying village Atun being included in urban area. The view taken by the Commissioner (Appeals) is correct and we do not find any ground for interference. Further the decisions cited by the respondents also apply to the issue under consideration. In view of the above, we hold that respondents are entitled to the benefit of the Notification No. 9/2001-C.E., dated 1-3-2001 and Notification No. 9/2003-C.E., dated 1-3-2003. - Decided in favour of assessee

Summary

Issues Involved:
Determining whether the village Atun falls in a rural or urban area for the admissibility of a concessional rate of duty under specific notifications.

Analysis:

Issue 1: Rural or Urban Area Classification
The primary issue in this appeal was to decide whether village Atun, where the factory premises of the appellants were located, should be classified as a rural or urban area for the purpose of availing concessional rates of duty under Notification No. 9/2001-C.E. and Notification No. 9/2003-C.E. The Department argued that village Atun had been notified as an urban area by the Rajasthan Government under the Rajasthan Urban Improvement Act, 1959. This notification was based on orders from various authorities declaring Atun as an urban area. However, the appellant's counsel contended that the order dated 3-7-1981 was misinterpreted as notifying Atun as an urban area, whereas it was actually a directive for a civic survey to prepare a master plan for the urban area of Bhilwara. The counsel also highlighted that the appellants did not have a case where Atun was included in the urban area's master plan. The Tribunal agreed with the appellant's arguments, emphasizing that the original authority had misinterpreted the 1981 order and that there was no evidence of Atun being included in any urban area master plan. Therefore, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the appeals and allowing the benefit of the concessional duty notifications to the respondents.

This judgment demonstrates the importance of accurate interpretation of notifications and orders in determining the classification of areas for tax benefits. It also underscores the significance of master plans and official designations in establishing the status of rural or urban areas for legal purposes. The case law cited by the respondents further supported the decision, emphasizing the need for clarity and adherence to legal definitions in such matters.