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TMI Blog2006 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 88/88-C.E. dated 1-3-1988 for the period from 1-4-1993 to 30-11-1995 and/or Notification 28/64-C.E. as amended by Notification 12/94-C.E. dated 1-3-1994. The decision of the Commissioner is strongly challenged by the appellant. 2.Shri M. Balagopal, the learned Advocate, appeared for the appellants and Shri R.K. Singla, the learned JCDR, for the Revenue. 3.The learned Advocate urged the following submissions :- The requirements for exemption under Notification(i) 88/88-C.E. dated 1-3-1988 have been fulfilled by the appellant as the factory is in a rural area and the same is an 'institution' recognized by the Khadi and Village Industries Commission/State Khadi and Village Industries Board. The Commissioner has held that the uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed institution for the purpose of Kerala Khadi and Village Industries Board's assistance. The question is how then the unit was financed by the Khadi and Village Industries as claimed in the first part of the letter. Obviously, this letter was issued at the request of the Superintendent of Central Excise. The Project Officer, Malapuram, on an enquiry made by the (iv) Secretary, Kerala Khadi and Village Industries Board, informed as per his letter dated 30-12-97, that the second sentence in his letter "which is not recognized as a registered institution" means that it was not a charitable society or cooperative society for availing Board's assistance. It is also submitted that the Project Officer appeared before the Commissioner and his ora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted the exemption as available under Notification 88/88-C.E. and 28/64-C.E. holding that it is an institution recognized by the Kerala Khadi and Village Industries Board. The facts are parallel to that of the appellant. The Commissioner has held that the appellant is not (viii) entitled for exemption in terms of Notification 28/64 dated 1-3-1964 as the appellant is using 30 HP diesel engine for the production of soap. The above-mentioned engine was used for mechanical stirrer and no electricity was produced as there was no alternator. If any power was produced, the appellant ought to have obtained licence from the Electricity Board. The Commissioner failed to consider whether power or steam was used for the purpose of heating. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals), Cochin, vide OIA No. 207/2001-C.E. dated 16-5-2001 holding that the appellant did not use power for heating and he was eligible for the benefit of Notification No. 28/64-C.E. dated 1-3-1964. 4. The learned JCDR reiterated the findings in the impugned Order-in-Original. 5. We have gone through the records of the case carefully. The Commissioner has denied the benefit of exemption notification 88/88-C.E. dated 1-3-1988 on the ground that a proprietary concern is not an institution. He has also held that since the appellant-unit is engaged in commercial activity, it cannot be held that it is an institution. Further, he has relied on a letter issued by the Project Officer, Malapuram ignoring the Certificates issued by District Khadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds manufactured in rural areas is to promote rural upliftment by promoting village industries etc. In the instant case, it is not disputed that the unit is located in a rural area. KVI Board Secretary vide certificate dated 19-1-1996 has certified that the unit is financed and recognized by KVI Board. Commercial activity is part and parcel of any manufacturing activity and where there is manufacture and sale, profit or loss is bound to occur. In the absence of any stipulation in the exemption notification that the institution should a charitable one, even if the profit or loss occurring goes to the account of the manufacturer, it does not in any way disqualify the unit from enjoying the benefit of Notification 88/88. By establishing a soap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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