Cce, Jaipur-I vs M/S.Sahakari Kitnashak Dawai Factory

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI

Date of Hearing/Decision:16.09.2015

Excise Appeal No.E/2097/2006-EX(DB)

[Arising out of Order-in-Appeal No.97(MPM)CE/JPR-I/2006 dated 22.03.2006 passed by the Commissioner (Appeals-I), Jaipur).

CCE, Jaipur-I Appellants

Vs.

M/s.Sahakari Kitnashak Dawai Factory Respondent

Appearance:

Rep. by Shri R.K. Grover, Advocate for the appellant.

Rep. by none for the respondent.

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Coram: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No.52949/2015 dated:16.09.2015

Per B.Ravichandran:

Revenue is in appeal against the order dated 22.03.2006 of the ld. Commissioner (Appeals). The respondents are engaged in the manufacture of insecticides subject to central excise levy. The Revenue initiated proceedings against the respondent to deny small scale exemption under notification no.9/2003-CE dated 1.3.2003. The respondent and another unit, M/s. Sahakari Pashu Ahar Factory, Jaipur were both owned by M/s. RAFED, which is a registered cooperative society, in turn owned by some cooperative societies and Rajasthan State Government. The case of the Revenue is that the aggregate value of the clearances of the excisable goods for one or more factories exceeded Rs.300 lakhs. Accordingly, proceedings were initiated. The Original Authority confirmed duty demand against the respondent holding that turnover of the respondent and M/s. Sahakari Pashu Ahar Factory should be taken together as they were neither owned nor maintained by the State Government. On appeal, ld. Commissioner (Appeals) vide the impugned order set aside the original order and allowed the appeal. He concluded that the respondents factory is belonging to and maintained by Rajasthan State Government and, therefore, the benefit provided under Clause E of Notification no.9/03-CE is available to them. Aggrieved by the said order, Revenue is in appeal.

2. In the appeal, it was contended that the respondents factory is neither owned by the State Government nor by the State Industries Corporation nor by the Khadi &Village Industries Corporation. As per Boards Circular dated 16.04.87, the benefit of concession may not be extended to the undertakings like RAJFED. It was contended that against the decision of the Tribunal, in a similar issue, in the case of Kerala State Cashew Development Corporation Ltd. - 2003 (162) ELT 390 (Tribunal-Bangalore), the Department has filed an appeal, which is pending with the Honble Supreme Court.

3. During the oral submissions, ld. AR reiterated the grounds of appeal. None appeared on behalf of the respondent.

4. We have examined the appeal records. We find that the ld. Commissioner (Appeals) examined the relevant issues comprehensively. He examined the details of the ownership of respondent and the scope of the term State relying on the decision of the Honble High Court of Rajasthan dated 23.03.1991 in CWP No.3714 of 1990. After detailed examination, he held that the clearances of the factories of State Government cannot be clubbed. The respondents factory is being maintained and controlled by the State Government and hence, SSI exemption based on their turnover is available. We find that in respect of the same respondent, this Tribunal decided the same issue vide order reported at 2014 (3) ELT 803 (Tribunal-Delhi). The Tribunal concluded that there is no dispute that the respondent unit and M/s. Sahakari Pashu Ahar Factory are owned by RAJFED. The maximum share capital of RAJFED is of the State Government. There is no share capital by any other person other than State/RAJFED. The Tribunal concluded that the respondent-unit is a company owned and controlled by the Government of Rajasthan and as such, the clearance of the respondent unit cannot be clubbed with other units for the purpose of SSI exemption. Considering the above decision of the Tribunal, in the respondents own case and detailed reasoning given in the impugned order, we find no ground to interfere with the order of the lower authority. Accordingly, we dismiss the appeal filed by the Revenue.

[operative portion already pronounced in the open court]

( Ashok Jindal )

Member (Judicial)

( B. Ravichandran)

Member (Technical)

Ckp.

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