1992 (7) TMI 189 - AT - Central Excise

Summary

Issues:
1. Appeal jurisdiction under the Khadi and Other Handloom Industries Development Act.
2. Eligibility for exemption from Handloom cess for independent processors of cotton fabrics.
3. Interpretation of Notification No. G.S.R. 1087 dated 18-6-1963 for exemption.

Analysis:

Issue 1:
The appeal was regarding the jurisdiction of the Tribunal under the Khadi and Other Handloom Industries Development Act. The appellant argued that provisions of the Central Excises and Salt Act apply to Act 12 of 1953, allowing appeals. The Tribunal and the Supreme Court had previously considered this issue. The Departmental Representative did not oppose, conceding on the issue of jurisdiction.

Issue 2:
The appellants claimed exemption from Handloom cess for processing cotton fabrics on powerlooms. They argued that as independent processors, they were entitled to exemption under Notification No. 1087 dated 18-6-1963. The authorities had denied the exemption, stating that independent processors were not eligible. The appellant's counsel contended that the relevant notification was not considered, and clarifications supported their claim for exemption.

Issue 3:
The key issue was the interpretation of Notification No. G.S.R. 1087 dated 18-6-1963 for exemption from Handloom cess. The notification exempted processed cotton cloth manufactured on powerlooms with specific conditions. The appellants argued that owning powerlooms was not a condition for exemption, and relevant clarifications supported their position. The Tribunal analyzed the notification and relevant clarifications, concluding that the appellants were eligible for exemption under the notification.

The Tribunal, after considering submissions and relevant notifications, found that the appellants were entitled to exemption from Handloom cess as per Notification No. G.S.R. 1087 dated 18-6-1963. The notification exempted processed cotton cloth manufactured on powerlooms, without requiring ownership of powerlooms. The clarifications issued by the Finance Ministry supported the appellants' claim for exemption. The Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellants.