2022 (2) TMI 356 - AT - Central Excise

Denial of benefit of Notification No. 88/88-C.E. dated 01.03.1988 - Denial on the ground that the registration certificate under the Tamil Nadu Societies Registration Act did not contain the name of M/s. SAC Industry - scope of Rural area - society was fake or otherwise? - HELD THAT - The tenor of the Show Cause Notices, inter alia, that the name of the Women‟s Society does not figure in any of the statutory documents, does not figure in the website of Sabari Soaps, that the labels and packing do not contain the name of the Women‟s Society, etc., are the reasons for denying the benefit of the Notification No. 88/88-C.E. - On perusal of the primary evidences / documents like registration certificate under the Tamil Nadu Societies Registration Act, 1975, certificate issued by the Tehasildar, etc., and by these alone it is satisfied that the appellant is a society, and is located in the rural area. To be specific, the appellant is registered as a cooperative society in the rural area, which is manufacturing one of the goods which is described in the table given in the Notification ibid., namely, laundry and carbolic soaps and thereby, the appellant satisfies the primary condition. The Women‟s Society comes under the inclusive clause including women‟s societies and by this, it is found that the appellant has even satisfied the inclusive part of the definition as well. By these, it can safely be concluded that the denial of benefit of exemption is patently wrong and unsustainable. When the appellant is focussing on achieving its objective by keeping a low profile, the allegations in the Show Cause Notices, which tantamount to publicity, is not the requirement of the Notification and to deny a benefit consequently, is arbitrary and unsustainable. When primary documents issued by Government agencies like the certificate of registration under the Tamil Nadu Societies Registration Act, certificate of the Village Officer and that of the Tehasildar speak for themselves, we do not need more than these basic documents to establish the status or location of the appellant. Unfortunately, only grave allegations are made, but no supporting documentary evidence is relied upon by the authority who issued the Show Cause Notice - there are no contrary findings based on any supporting material piece of evidence, to demolish the contentions of the appellant, which are duly supported by concrete evidences. The denial of benefit of Notification No. 88/88-C.E. dated 01.03.1988 has been made on whims and fancies and without there being the support of any documentary evidences and hence, the same cannot be sustained - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of benefit of Notification No. 88/88-C.E. dated 01.03.1988 based on alleged discrepancies in registration documents and other statutory requirements.

Analysis:
The appeals challenged the denial of benefits under Notification No. 88/88-C.E. dated 01.03.1988, with common issues across multiple appeals against Order-in-Original No. CAL-EXCUS-000-COM-013-16-17, CAL-EXCUS-000-COM-014-16-17, and CAL-EXCUS-000-COM-015-16-17 dated 29.12.2016, heard together and disposed of collectively.

The appellant, a manufacturer of handmade laundry soap without power aid, registered as a Women's Society under the Tamil Nadu Societies Registration Act, faced three Show Cause Notices alleging discrepancies in registration documents and exemption claims. Despite providing detailed responses and supporting documents, the Commissioner upheld the denial of benefits under Notification No. 88/88-C.E., leading to the appeals.

The appellant's counsel argued that all necessary information was submitted as per Central Excise Rules, highlighting the society's ownership and rural location in various documents like loan orders, audit reports, and certificates from tax and revenue authorities. The appellant's compliance with rules and declarations, along with documentary evidence, aimed to prove legitimacy and eligibility for the notification's benefits.

The Tribunal examined primary evidence like registration certificates and local authority certifications, confirming the appellant's status as a rural cooperative society manufacturing goods specified in the notification. The inclusive clause covering women's societies further supported the appellant's eligibility, leading to the conclusion that the denial of exemption was unfounded and unsustainable.

The Tribunal criticized the lack of substantial evidence supporting the allegations in the Show Cause Notices, emphasizing the sufficiency of basic documents like registration certificates and official certifications. The authority's failure to provide concrete evidence to counter the appellant's claims weakened the basis for denial of benefits under the notification.

Relying on relevant case law and decisions, the Tribunal found the denial of benefits arbitrary and unsupported by factual evidence, leading to the setting aside of the impugned order and allowing the appeals with consequential benefits, if any, as per law. The judgment highlighted the importance of documentary evidence and adherence to legal requirements in determining eligibility for statutory benefits.