1999 (11) TMI 463 - AT - Central Excise

Summary

Issues:
Denial of benefit under Notification No. 175/86 to the appellants based on ownership by the State Government.

Analysis:

The appeal was filed against the order-in-original dated 17-6-1993 by the Collector of Central Excise, denying the benefit of Notification No. 175/86 to the appellants on the grounds of ownership by the State Government. The appellants, M/s. M.P. State Mining Corpn. Ltd., contended that they are wholly owned by the State Government and should be considered a State for the purpose of the notification. The appellants' counsel referenced a decision of the Madhya Pradesh High Court and a Tribunal case to support their argument that entities like M/s. M.P. State Mining Corpn. Ltd. should be recognized as State Government undertakings. The Collector had previously granted the benefit of the exemption under Notification No. 175/86 to another unit of the appellants, acknowledging State Government maintenance. The matter was remanded for fresh adjudication considering the High Court and Tribunal decisions.

The Revenue, represented by the Departmental Representative, reiterated the Collector's findings that the units of the appellants were not owned or maintained by the State Government, leading to the denial of the notification's benefit. However, the Tribunal found merit in the appellants' argument based on the Madhya Pradesh High Court's decision and the Tribunal's ruling in a similar case involving a State Undertaking Corporation maintained by the Tamil Nadu Government. These post-order decisions supported the appellants' claim of being entitled to the exemption under Notification No. 175/86 due to State Government ownership.

The Tribunal, comprising S/Shri S.S. Kang and V.K. Agrawal, set aside the impugned order and remanded the matter to the adjudicating authority for a fresh decision. The Tribunal emphasized the significance of the High Court and Tribunal decisions in recognizing entities like M/s. M.P. State Mining Corpn. Ltd. as State Government agencies eligible for the exemption under Notification No. 175/86. The appellants were granted an opportunity for a personal hearing during the fresh adjudication process, concluding the appeal in favor of the appellants based on the ownership by the State Government and relevant legal precedents.