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TAXAP/997/2009 3/ 5 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 997 of 2009
For
Approval and Signature:
HONOURABLE
MR. JUSTICE D.A.MEHTA
HONOURABLE
MS. JUSTICE H.N.DEVANI
=========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================
COMMISSIONER
OF CENTRAL EXCISE AHMEDABAD-II - Appellant(s)
Versus
SWADESHI
KHADI GRAMODHYOG SEVA SANGH - Opponent(s)
=========================================
Appearance
:
MR DARSHAN
M PARIKH for
Appellant(s) : 1,
MS AVANI S MEHTA for Opponent(s) :
1,
=========================================
CORAM
:
HONOURABLE
MR. JUSTICE D.A.MEHTA
and
HONOURABLE
MS. JUSTICE H.N.DEVANI
Date
: 04/03/2010
ORAL
JUDGMENT
(Per : HONOURABLE MR. JUSTICE D.A.MEHTA)
1. This
appeal filed by Revenue challenges order dated 29th
January, 2009 made by Customs Excise and Service Tax Appellate
Tribunal (the Tribunal) by proposing following five questions:-
Whether
the assessee was entitled to the benefit of the Circular without
fulfilling the criteria laid down in the circular?
When
the exemption notification itself provides for the certificate from
KVIC and once the certificate is produced, can the Revenue not come
to an independent conclusion whether in the facts of the case and
considering the certificate, the assessee is entitled to the benefit
of the notification?
In
light of facts and circumstance mentioned herein and in absence of
any certificate, whether the Hon’ble CESTAT is justified in holding
that what is required is a certificate by the KVIC and the same has
been produced by the appellants?
In
light of the facts and circumstances mentioned hereinabove, whether
the Hon’ble CESTAT is justified that the clarification issued by
KVIC regarding rural area eligibility of the unit because of the
provision in the KVIC Act supports the case of the appellants?
In
light of the facts and circumstances mentioned hereinabove, whether
the Hon’ble CESTAT is justified in allowing the appeals filed by the
appellants with consequential relief?
2. Learned
counsel appearing for the appellant submitted that the Tribunal had
committed an error in coming to the conclusion that the respondent
was a unit which was fulfilling criteria laid down by the
Notification No.198/87-CE dated 28th August, 1987.
Emphatically reading the proviso appearing in the first paragraph of
the Notification, it was submitted that the two conditions laid down
in the proviso were cumulative because of the use of the term ‘and’
and, therefore, the certificate envisaged by the third condition
enumerated in the proviso had to be categorical in this regard. It
was further submitted that the Tribunal had committed an error in
relying upon the certificate issued by Khadi and Village Industries
Commission (KVIC) without examining the contents of the certificate.
It was, therefore, urged that the impugned order of Tribunal granting
exemption to the respondent assessee by treating the same as a unit
producing specified goods of a village industry gave rise to a
substantial question of law as proposed or otherwise.
3. The
facts are not in dispute. Respondent assessee is engaged in
manufacture of wooden and steel furniture articles falling under
Chapter Heading 94.03 of the Central Excise Tariff Act, 1985. The
only controversy is as to whether the said products can be termed to
be specified goods of village industry entitled to exemption as per
aforesaid notification dated 28th August, 1987. The
relevant proviso which appears in the notification imposes conditions
subject to which goods answering the description specified in Column
No.2 of the table appearing in the notification are exempted from the
whole of the duty of excise leviable.
4. The
said proviso reads as under:-
Provided
that –
such
goods are genuine products of a village industry; and
such
goods are marketed by or with the assistance of the Khadi and
Village Industries Commission established under the Khadi and
Village Industries Commission Act, 1956 (61 of 1956); and
the
manufacturer of such goods produces a certificate from the said
Commission to the effect that :
(i) such
goods are the genuine products of a village industry; and
(ii) such
goods are marketed by or with the assistance of the said
Commission.
Limited
question that would, therefore, arise is as to whether the
certificate issued by KVIC fulfills the conditions stipulated by the
proviso. In this context, if one reads the certificates dated 26th
July, 2007 and 07th November, 2007, as reproduced in
paragraph no.35.15 of the order-in-original, it becomes clear that
the certificates issued by KVIC fulfill the requirement of the
proviso in the notification entitling the assessee to successfully
claim exemption.
5. In
the circumstances, it is not possible to state that the impugned
order of Tribunal suffers from any error so as to give rise to a
substantial question of law. The appeal is accordingly dismissed.
(
D.A. Mehta, J. )
(
Harsha Devani, J. )
hki
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