Home Case Index All Cases Central Excise Central Excise + HC Central Excise - 2018 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 1931 - HC - Central ExciseExemption of central excise duty under the notification dated 1-3-2001 - independent processor - it is the stand of the petitioner that, during the relevant point of time, i.e., between 2001-2004, the petitioner had been involving or engaging only in processing of fabrics as an independent processor and not involving any other activities even though number of activities had been mentioned in the memorandum of articles of the petitioner company - HELD THAT:- The manufacturer is the petitioner company. The petitioner company, even according to the respondents, has not engaged in the spinning of yarn or cotton weaving of cotton fabrics and the petitioner company does not have any proprietary interest over the said factories or companies. Merely because one or more shareholders of the petitioner company is having proprietary interest in some other factory engaged in yarn or cotton, it does not mean that the petitioner is having direct control and proprietary interest over the said factories. Since, the petitioner company is a registered company under the Companies Act, no doubt it is a juristic person and every shareholder of the petitioner company is independently a juristic person. Merely because one or more shareholders of the petitioner company is having proprietary interest in other factories that would not ipso facto make the petitioner company that it also have such proprietary interest over the said factories. This distinction has not been considered by the sixth respondent while making the recommendatory note through her order dated 13-2-2003 supplied to the first respondent. The intention of the notification to give exemption to excise duty is to encourage the independent processor and in this regard, the Government of India has given power to the first respondent to independently assess every claim made in this regard by a processor as to whether he is an ‘independent processor’ for the purpose of exemption of excise duty and such power shall be exercised cautiously and diligently. In the case in hand, merely because the petitioner is a limited company and it is having memorandum of articles and objects to have various activities apart from textile industry, based on which, no decision can be taken that the petitioner company could not be eligible to get the benefit of independent processor merely because, it is having other objects in the memorandum of articles. If this kind of decision is taken to reject the claim of the petitioner, then, the very purpose of giving exemption to the eligible processor would get defeated thereby, the very object of giving exemption notification would also get defeated - the reasoning given by the sixth respondent in her communication dated 13-2-2003 would not be sustainable and based on which, without giving an opportunity to the petitioner since, the first respondent mechanically passed the impugned order rejecting the claim of the petitioner which can also be unsustainable and therefore, this Court has no hesitation to interfere with both the impugned orders. The matter is remitted back to the first respondent for reconsideration - While making such re-consideration, the first respondent must independently apply his mind of course on the inputs supplied by the sixth respondent by taking into account the supporting materials supplied by the petitioner to establish the status as an ‘independent processor’ for the relevant period i.e., between 2001-2004 where assertively the petitioner claimed that he did not involve in any other manufacturing or spinning or woven process of fabrics except the independent processing as set out in the exemption appended to the notification. Petition allowed by way of remand.
|