2011 (4) TMI 1194 - AT - Central Excise

Tribunal Upholds Exemption for Respondents Based on Factory Ownership

The Tribunal upheld the benefit of the exemption notification for the respondents, emphasizing the ownership of a relevant factory over the specific ... Exemption under Notification No. 115/75-CE dated 30.04.75 - as per department the process undertaken in the factory of the assessee in relation to refining of the crude oil did not include process of milling therefore, they were not entitled for the exemption benefit under the said notification - Held that:- The said notification nowhere relates to the process undertaken by a manufacturer - It requires the manufacturer to have a factory of the description given in the schedule - Whereas it is not disputed that the assessee had oil mill and solvent extraction industry which is one of the industries enlisted in the schedule to the said notification - Do not find any fault in the impugned order granting the benefit of exemption notification to the assessee. Issues:Interpretation of Notification No. 115/75-CE dated 30.04.75 for exemption benefit under Central Excise Tariff Act, 1985.Detailed Analysis:Issue 1: Interpretation of Notification No. 115/75-CEThe case involved the interpretation of Notification No. 115/75-CE dated 30.04.75 for exemption benefit under the Central Excise Tariff Act, 1985. The respondents were engaged in the manufacture of de-oiled cake and refined soya oil out of soyabean seeds, cleared at a nil rate of duty. The dispute arose when the department observed that the respondents were importing crude soyabean at a concessional rate of duty and clearing the refined product without payment of duty, claiming exemption under the said notification. The department issued a show cause notice for recovery of duty, which was contested by the respondents. The adjudicating authority confirmed the duty demand, but the Commissioner (Appeals) set aside this decision, leading to the appeal.Issue 2: Factory Requirement for ExemptionThe key contention revolved around whether the respondents were entitled to claim the benefit of the exemption notification, which required the manufacturer to have a factory of a specific type as listed in the schedule appended to the notification. The department argued that the refining process undertaken by the respondents did not involve milling or solvent extraction, thus disqualifying them from the exemption. However, it was established that the respondents did possess an oil mill and solvent extraction industry, which was one of the industries listed in the schedule. The dispute centered on the process undertaken by the respondents, not the ownership of a relevant factory.Issue 3: Tribunal Decisions and PrecedentsThe Departmental Representative (DR) referred to previous Tribunal decisions in similar cases, but the Tribunal distinguished those cases as having different factual contexts. The Tribunal emphasized that the crucial factor was whether the manufacturer owned a factory as described in the schedule to the exemption notification, rather than the specific process involved in manufacturing. As the respondents had the requisite industry listed in the schedule, the Tribunal found no grounds for interference in the impugned order, leading to the dismissal of the appeal.In conclusion, the Tribunal upheld the benefit of the exemption notification for the respondents, emphasizing the ownership of a relevant factory over the specific refining process undertaken. The appeal was dismissed based on the lack of grounds for interference in the impugned order.