2008 (9) TMI 155 - AT - Service Tax

Appellants claim that they are covered by exemption Notification No.43/97-ST - It is their case that they fall in the category of factory other than a factory registered as Small Scale Industries with the State Government held that non-trading private companies even though registered as a small scale industries are not entitled to the exemption under Notification No.43/97 appeal is dismissed

Summary

Issues involved:
Interpretation of exemption Notification No.43/97-ST dated 05.11.1997 for a company registered as a private limited company falling under exclusion Clause (i) but claiming to be covered under Clause (ii).

Analysis:
The judgment by the Appellate Tribunal CESTAT, Kolkata, involved the interpretation of exemption Notification No.43/97-ST dated 05.11.1997 for a company registered as a private limited company. The Appellants claimed to be covered by the exemption as retrospectively amended through the Twelfth Schedule to the Finance Act, 2003 w.e.f. 16.11.1997. They argued that they fell in the category of a factory other than a factory registered as Small Scale Industries with the State Government. However, the lower appellate Authority concluded that the Appellants, although falling under the exclusion Clause (i) of the Notification, were covered under Clause (ii) as a company other than a trading company and registered as a private limited company. The Tribunal noted that for the purpose of the Notification, falling under any of the categories (i) to (viii) would disqualify from the exemption. Since the Appellants fell under Clause (ii), they were deemed ineligible for the exemption, even though they did not fall under Clause (i) or any other items from (iii) to (viii). Therefore, the Tribunal held that non-trading private companies, even if registered as small scale industries, were not entitled to the exemption under Notification No.43/97. Consequently, the Tribunal found no grounds to interfere with the orders passed by the lower Authorities.

In conclusion, the Appellate Tribunal dismissed both Appeals, emphasizing that non-trading private companies, even if registered as small scale industries, were not entitled to the exemption under Notification No.43/97. The Tribunal's decision was based on the specific categorization outlined in the Notification, which deemed companies falling under Clause (ii) ineligible for the exemption, irrespective of other criteria. The judgment highlights the importance of precise interpretation of statutory provisions in determining eligibility for exemptions under tax laws, ensuring consistent application and compliance with the legislative framework.