9911796707
TMI Blog2006 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Malabar Soap Works, a sole proprietary concern is not eligible for exemption from payment of excise duty on the Laundry Soap manufactured in their factory situated in a rural area in terms of Notification No. 88/88-C.E. dated 1-3-1988 for the period from 1-4-1993 to 30-11-1995 and/or Notification 28/64-C.E. as amended by Notification 12/94-C.E. dated 1-3-1994. The decision of the Commissioner is strongly challenged by the appellant. 2. Shri M. Balagopal, the learned Advocate, appeared for the appellants and Shri R.K. Singla, the learned JCDR, for the Revenue. 3. The learned Advocate urged the following submissions :- The requirements for exemption under Notification(i) 88/88-C.E. dated 1-3-1988 have been fulfilled by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first part of the letter confirms that the appellant's unit has been financed by the Kerala Khadi and Village Industries Board. The second part of the letter states that the unit is not recognized as registered institution for the purpose of Kerala Khadi and Village Industries Board's assistance. The question is how then the unit was financed by the Khadi and Village Industries as claimed in the first part of the letter. Obviously, this letter was issued at the request of the Superintendent of Central Excise. The Project Officer, Malapuram, on an enquiry made by the (iv) Secretary, Kerala Khadi and Village Industries Board, informed as per his letter dated 30-12-97, that the second sentence in his letter "which is not recognized as a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h alone, the Government has granted exemption for the unit set up in rural area. Another proprietary concern viz. Flash Soap Works (vii) mentioned in the Project Officer's letter dated 20-11-1995 has been granted the exemption as available under Notification 88/88-C.E. and 28/64-C.E. holding that it is an institution recognized by the Kerala Khadi and Village Industries Board. The facts are parallel to that of the appellant. The Commissioner has held that the appellant is not (viii) entitled for exemption in terms of Notification 28/64 dated 1-3-1964 as the appellant is using 30 HP diesel engine for the production of soap. The above-mentioned engine was used for mechanical stirrer and no electricity was produced as there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent with the demand for duty cannot be sustained." An OIO, demanding duty from the appellant for a later (xi) period from 1-12-1995 to 15-4-1997, has been set aside by the Commissioner of Central Excise (Appeals), Cochin, vide OIA No. 207/2001-C.E. dated 16-5-2001 holding that the appellant did not use power for heating and he was eligible for the benefit of Notification No. 28/64-C.E. dated 1-3-1964. 4. The learned JCDR reiterated the findings in the impugned Order-in-Original. 5. We have gone through the records of the case carefully. The Commissioner has denied the benefit of exemption notification 88/88-C.E. dated 1-3-1988 on the ground that a proprietary concern is not an institution. He has also held that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution. Therefore, we feel that even if the institution is engaged in commercial activities, there is no reason why the benefit of Notification 88/88 cannot be extended to it. Further, the very purpose of exempting certain goods manufactured in rural areas is to promote rural upliftment by promoting village industries etc. In the instant case, it is not disputed that the unit is located in a rural area. KVI Board Secretary vide certificate dated 19-1-1996 has certified that the unit is financed and recognized by KVI Board. Commercial activity is part and parcel of any manufacturing activity and where there is manufacture and sale, profit or loss is bound to occur. In the absence of any stipulation in the exemption notification that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
