2000 (10) TMI 381 - AT - Central Excise

Tribunal rules against appellant in excise duty appeal for laundry soaps classification

DEVI LAL KUTIR SOAP Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II

DEVI LAL KUTIR SOAP Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II - 2001 (127) E.L.T. 143 (Tri. - Del.) Issues: Classification of laundry soaps for excise duty - Applicability of tariff entry 3401.13 - Benefit of Notification No. 88/88-C.E. - Interpretation of 'institution recognized by Khadi and Village Industries Commission' - Relevance of departmental clarification on 'rural area'.Classification of Laundry Soaps:The appellant, a proprietary concern manufacturing laundry soaps, contested the excise duty assessment arguing that the product falls under tariff entry 3401.13, attracting nil duty. However, the tribunal found that the appellant's unit did not meet the criteria of being owned by an organization approved by the Khadi and Village Industries Commission as specified in the tariff entry. Therefore, the tribunal concluded that the appellant's unit could not claim the benefit of nil duty under the said tariff entry.Benefit of Notification No. 88/88-C.E.:The appellant also sought the benefit of Notification No. 88/88-C.E., which pertains to goods manufactured in rural areas by specific entities. The tribunal analyzed the notification's scope, emphasizing that the appellant's unit did not qualify as an institution recognized by the Khadi and Village Industries Commission or State Khadi and Village Industries Board. The tribunal applied the principle of ejusdem generis to interpret the notification, concluding that the appellant's unit, being individually owned, did not fall within the category of institutions mentioned in the notification, thus denying the benefit claimed by the appellant.Interpretation of 'Institution Recognized by Khadi and Village Industries Commission':The tribunal delved into the interpretation of what constitutes an 'institution recognized by Khadi and Village Industries Commission' under the notification. By applying the ejusdem generis principle, the tribunal reasoned that since the notification included co-operative societies and women's societies as precedents, institutions must align with these types of entities. Consequently, the tribunal determined that an individually owned unit could not be considered an institution recognized by the Commission, thereby rejecting the appellant's argument based on this interpretation.Relevance of Departmental Clarification on 'Rural Area':Lastly, the appellant relied on a departmental clarification regarding the definition of 'rural area' in relation to the notification. However, the tribunal dismissed this argument, stating that the clarification was not pertinent to the issue at hand concerning the classification of laundry soaps and the applicability of excise duty. Therefore, the tribunal held that the appellant could not derive any benefit from the departmental clarification on the definition of 'rural area.'In conclusion, the tribunal found no merit in the appellant's appeal and consequently dismissed it based on the analysis of the classification of laundry soaps, the interpretation of relevant notifications, and the inapplicability of the departmental clarification to the case at hand.