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2009 (8) TMI 1024

..... r the Respondent. ORDER Since in both the appeals common questions of law and facts arise, they were heard together and are being disposed of by this common order. 2. The appeals arise from the order dated 27-8-2004 passed by the Commissioner (Appeals), Meerut-I whereby the appeals filed by the appellants have been dismissed. The said appeals were filed by the appellants against the order dated 21-6-2004 passed by Deputy Commissioner, Dehradun whereby the SSI exemption claimed by the appellants was sought to be rejected and the demand of duty to the tune of Rs. 4,40,000/- was confirmed and recovery thereof was ordered under Section 11A of the Central Excise Act, 1944 along with interest thereon and further penalty of the amount equal to the .....

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..... (Tri.-Bang.), CCE, Bangalore-III v. Srijee Foods reported in 2006 (198) E.L.T. 219 (Tri. Bang.), Katyani Foods & Beverages (P) Ltd. v. CCE, Meerut reported in 2004 (170) E.L.T. 82 (Tri.-Del.) and Karunya Matha Social Centre v. CCE, Cochin reported in 2004 (168) E.L.T. 226 (Tri. - Bang.). He further submitted that the appellants have further evidence in the form of certificate issued by the Managing Director of Zila Udyog Kendra, Dehradun as well as by the Tehsildar of Dehradun. The first certificate would disclose that the area in question comprises of rural area and second certificate would disclose the survey number of the concerned land situated in the rural area. According to the learned Advocate, the certificates refer to the fact .....

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..... case has been made out and, therefore, the so-called certificates sought to be produced, should not be allowed to be relied upon nor there is a case for remand. Reliance was sought to be placed in the decision of Eagle Flask Industries Limited vs. CCE, Pune reported in 2004 (171) E.L.T. 296 (S.C.). 5. The controversy in the matter in hand relates to the claim of benefit under Notification No. 8/2002-C.E., dated 1-3-2002, whereunder the SSI exemption for units not availing Cenvat credit was sought to be granted subject to condition that the specified goods were manufactured in a factory located in the rural area . The explanation to the said notification under Clause 5(H) defines the term rural area means the area comprised in a village as d .....

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..... the notification. 8. In the case in hand, the appellants while claiming the benefit under the said notification had produced a certificate dated 12-5-2004. The contention that such certificate was not at all considered by the authority is to be rejected in limine in view of the fact that Commissioner (Appeals) in its order has in fact considered the said certificate and rejected the same for valid reason. The certificate nowhere discloses to have been issued by an authority who is competent to certify as to whether the particular area forms part of any village or not. The law clearly requires that the area should be shown as the rural area as defined in the land revenue records. In other words, the revenue authorities should have to verify .....

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..... lishment and not rural area. We have various instances in the country where establishment of industries in rural area is encouraged. Being so, it is difficult to accept the contention on behalf of the Department that merely because it is shown that the unit is situated in the industrial area, it would lead to the conclusion that it will cease to be the rural area. 11. As already observed above, once it was not the case of the Department while issuing show cause notice that the area in question was not rural area and merely on the basis of the reply filed by the appellants claiming that the area is rural area, the authority without calling the appellants to produce the evidence in that regard, having proceeded to deny the benefit under said .....

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