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TMI Blog2015 (2) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... or weaving fabrics and does not cover the knitting units. Knitting of fabrics is totally different from weaving and since in this case, the respondent have taken on lease a knitting unit and not a weaving unit or spinning unit, in our view, they would be not be covered by the exclusion clause. - Moreover a person by acquiring a property on lease, only acquires the right to use without acquiring the ownership. Unless the person has acquired the title to the property i.e. the ownership, he cannot be said to have acquired proprietary interest. - Thus proprietary interest means acquiring the ownership or exclusive proprietary rights to a property. A lessee has acquired only the right to use for a specified period without the transfer of ownersh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompounded levy scheme. The Commissioner of Central Excise, Chandigarh II provisionally determined their capacity of production and their monthly duty liability vide order dated 22/4/99. However, the respondent vide letter dated 16/3/99 informed the Department that they have started a knitting factory by taking the knitting unit of M/s Adarsh Textile, located at 18B, East Mohan Nagar, Amritsar on lease and accordingly pleaded that they will go out of the definition of independent processor as given in the Explanation to Notification No. 41/98-CE (NT). The respondent accordingly claimed that they are not required to pay duty under the compounded levy scheme notified under Section 3A of the Central Excise Act and accordingly they did not pay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under the definition of independent processor and, therefore, were not liable to pay duty under compounded levy scheme. Commissioner also set aside the duty demand of ₹ 6,12,150/- confirmed in the earlier order of the Commissioner. Against this order of the Commissioner, the Revenue has filed Appeal No. E/2398/2006 EX (DB) before the Tribunal and the respondent have filed cross objection No. E/CO/121/2010. 1.3 Hon ble Punjab Haryana High Court in respect of Revenue s appeal CA No. 58/2011 (O M) where M/s Vishal Tex Feb Pvt. Ltd. is the respondent has, vide order dated 30th September, 2014 directed the Tribunal to decide the present appeal No. E/2398/2006, where the issue involved is as to whether the appellant during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 349 (Ori.), exemption notifications issued under fiscal laws have to be strictly construed and the words used therein are to be understood according to their plain phraseology and not on the basis of any presumption, that the Apex court s judgment in the case of Commissioner of Income Tax vs. Narang Diary Products 1996 (219) I.T.R. was dealing with the issue of development rebate, whether to be granted to the party when they have given plant and machinery on lease and similarly the issue involved in the case of A.R. Krishnan Murthy 1989 (176) I.T.R. 417 was whether the grant of mining lease for the period 10 years given to the party can give rise to a capital gain taxable under Income Tax Act, that the issue involved in the judgments reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cs with the aid of power and who has facility in his factory (including plant and equipment) for carrying out heat setting with the aid of power or stream in a hot air stenter and who has no proprietary interest in any factory engaged in the spinning of yarn or weaving of fabrics 7. Thus, in terms of the definition of independent processor, a manufacturer of processed fabrics for being treated as independent processor, must be (a) engaged exclusively in the processing of fabrics with the aid of power and also must be having in his factory the facility for carrying out heat setting with the aid of power or stream in hot air stenters ; and (b) he should not have proprietary interest in any factory engaged in the spinning of yarn or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to or characteristic of an owner or ownership. In Webster s Third New dictionary, the word Proprietor is defined as an owner who has legal right or exclusive title to something whether in possession or not. The Apex Court in the case of Aphali Pharmaceuticals Ltd. vs. State of Maharashtra reported in 1989 (44) E.L.T. 613 (S.C.) has in para 24 of the judgment, while interpreting the scope of the term patent or proprietor medicines interpreted the term proprietary as under : the proprietary means a proprietor, that is holding proprietary rights A proprietor is the one who has legal right or exclusive title to anything . Thus proprietary interest means acquiring the ownership or exclusive proprietary rights to a property. A lessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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