SC rules no ownership proof needed for woollen fabric factory exemption under Notification No. 30/81-C.E.

The SC allowed the appeals, setting aside the Tribunal's order denying exemption under Notification No. 30/81-C.E. The Court held that appellants were not required to prove ownership of the factories producing woollen fabrics to claim exemption. It directed the Revenue to issue a show-cause notice if it disputed entitlement on factory ownership grounds and proceed accordingly. Any tax paid under the Tribunal's order was to be refunded. No order as to costs was made.

---

---

The Supreme Court of India, through S.P. Bharucha and K.S. Paripoornan, JJ., addressed appeals concerning the appellants' entitlement to exemption under Exemption Notification No. 30/81-C.E., dated 1st March 1981, issued under Rule 8(1) of the Central Excise Rules. The Revenue initially contended that appellants were ineligible as they were not registered as handloom cooperative societies or government-approved organizations for handloom development; this contention was rejected by the Tribunal. However, the Tribunal upheld the Revenue's claim that appellants failed to prove production of woollen fabrics in "a factory owned by" them. The Court found no requirement during proceedings for appellants to demonstrate ownership of the factories and held that the Tribunal's refusal of exemption on this ground must be set aside. The Court directed that if the Revenue disputes entitlement based on factory ownership, it must issue a show-cause notice and proceed accordingly. The appeals were allowed, the impugned order set aside, and any tax paid under the Tribunal's order was to be refunded. There was no order as to costs.

---