2016 (6) TMI 670 - AT - Central Excise

Applicability of small scale exemption Notification No. 8/2003-CE dated 01.03.2003 - appellants were using the brand name of another person and the lower authorities sought to deny the benefit of the notification in question - Held that - Admittedly the village in question has not been notified as an urban area either by the Central Government or a State Government. The Revenue is relying on only upon an amalgamation scheme of local planning area for the city of Hubli and Dharwad where the village in question may be included. Inasmuch as the said explanation defines rural area as a village defined in the land revenue records, for which purpose a certificate stands issued by the Tahsildar of the village, holding the said area to be a rural area and which certificate does not stand challenged by the Revenue, we find no justifiable reasons to ignore the said certificate of the Tahsildar. It may not be out of place to mention here that in terms of the definition as contained in the above referred explanation, the area comprised in a village and as defined in the land revenue records is the rural area. Land revenue records are maintained by the Tahsildar, who is the proper authority to give the certificate. We cannot step into shoes of the local Tahsildar to find out as to whether the certificate given by him is correct or not. Otherwise also the Revenue is not assailing the said certificate as incorrect, we cannot ignore the certificate in question. In our view the same stands rightly taken into consideration by the Commissioner. - Decided against revenue

Summary

Issues:
Applicability of small scale exemption Notification No. 8/2003-CE dated 01.03.2003 based on the rural or urban classification of the factory's location in Anchatgeri village.

Analysis:
The dispute in the present appeal revolves around the interpretation of Notification No. 8/2003-CE regarding the applicability of small scale exemption. The appellants, using another person's brand name, claimed the exemption, arguing that their unit in Anchatgeri village is in a rural area. However, the original adjudicating authority denied the exemption, citing a notification from the Government of Karnataka amalgamating the local planning area of Hubli and Dharwad, which allegedly included Anchatgeri in an urban area. The Commissioner (Appeals) disagreed, stating that the notification did not explicitly change Anchatgeri's classification from rural to urban, and referred to a Tribunal decision supporting this view.

The Revenue, in their appeal, relied on Explanation 5(H) of the notification defining "rural area" as a village as per land revenue records, excluding areas notified as urban. They argued that Anchatgeri might be included in the urban planning area but has not been officially declared urban by the Central or State Government. The appellants presented a Tahasildar's certificate certifying Anchatgeri as a rural area. The Tribunal emphasized the importance of the Tahasildar's certificate, as it is the authority on land revenue records and the rural classification of the village. Since the Revenue did not challenge the certificate's validity, the Tribunal upheld its relevance and found no fault in the Commissioner's decision to consider it. The Tribunal concluded that the certificate was correctly taken into account, and thus rejected the Revenue's appeal.

In summary, the Tribunal's judgment hinged on the interpretation of the small scale exemption notification and the classification of Anchatgeri village as rural or urban. The Commissioner (Appeals) and the Tribunal both emphasized the significance of the Tahasildar's certificate in determining the rural status of the village, ultimately leading to the rejection of the Revenue's appeal.