Rural area exemption under Notification No. 9/2001-CE applies where a village is not expressly notified as urban.

A factory qualified for exemption under Notification No. 9/2001-CE because it was situated in a rural area. The exemption applied to goods manufactured in factories located in rural areas, and the exclusion in Explanation (H) covered only areas under local municipal bodies or areas expressly notified as urban by the Central Government or a State Government. The State notification relied upon by the Revenue merely placed village Raiwala within the Haridwar Development Area for planned development; it did not expressly notify the village as urban. Revenue records and the Sub-Divisional Magistrate's certificate also supported the rural character of the location, so the exemption was held applicable and the impugned order was set aside.

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Issues: Whether the factory was situated in a rural area so as to qualify for the benefit of Notification No. 9/2001-CE.

Analysis: The notification granted exemption to specified goods manufactured in a factory located in a rural area, and Explanation (H) excluded only areas under local municipal bodies or areas notified as urban by the Central Government or a State Government. The State notification relied upon by the Revenue did not in express terms notify village Raiwala as an urban area; it only brought the village within the Haridwar Development Area for planned development. The revenue records and the certificate of the Sub-Divisional Magistrate also supported the position that the factory was situated in a rural area.

Conclusion: The factory was held to be located in a rural area, and the appellants were entitled to the benefit of Notification No. 9/2001-CE.

Final Conclusion: The impugned order was set aside and the appeal was allowed on the footing that the exemption applied to the appellants.

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