Research institute exemption denied where a commercial factory laboratory did not satisfy the notification requirement.

Exemption under Notification No. 167/71-C.E. was denied because the factory laboratory could not be treated as a research institute of a technical educational or research type. The authorities found that the unit was engaged in commercial production and sale of high energy storage batteries, so the laboratory did not acquire the character required by the notification. On that basis, the claim for exemption failed and the finding was against the assessee.

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Issues: Whether the appellants were entitled to exemption under Notification No. 167/71-C.E. dated 11-9-1971 on the ground that the goods were manufactured in a Research Institute.

Analysis: The claim for exemption depended on whether the factory laboratory could be treated as a research institute of a technical educational or research type. The authorities found that the appellants were engaged in commercial production and sale of high energy storage batteries, and that the laboratory in such a commercial factory did not satisfy the character of a research institute for the purpose of the notification. No infirmity was found in that view.

Conclusion: The appellants were not entitled to the exemption, and the finding was against the assessee.

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