Custom, Excise & Service Tax Tribunal
M/S. Ravi Bottling (P) Ltd vs Cce&C, Visakhapatnam on 20 October, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/678 to 680/2007 (Arising out of Order-in-Appeal No.77/2007 dt. 04/08/2007; No.79/2007 dt. 04/08/2007 & No.80/2007 dt. 04/08/2007) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member(Judicial) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Ravi Bottling (P) Ltd. ..Appellant(s) Vs. CCE&C, Visakhapatnam ..Respondent(s)
Appearance Ms. A.S.K. Swetha, Advocate for the appellant.
Shri Arun Kumar, Deputy Commissioner(AR) for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:20/10/2016 Date of decision:20/10/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The short issue involved in the appeal is whether the appellants factory is situated in rural area in order to be eligible for the benefit of SSI exemption in terms of Notification No.8/2002-Ce dt. 01/03/2002 and No.8/2003-CE dt. 01/03/2003.
2. The appellants are engaged in the manufacture of aerated water and have their unit situated in village of Boravanipalem in Paradesipalem, Visakhapatnam. They manufactured and cleared aerated water under various brand and trade names availing the benefit of rural area exemption under the above said notifications during the periods 2002-03 and 2003-04 respectively. The Department entertained a view that the location of the factory is excluded from the benefit of rural area exemptions as per Explanation (H) to paragraphs 4 of the above stated notifications. A show-cause notice was issued alleging the same and proposing to demand duty along with interest and also proposing to impose penalty. After due process of law, the original authority confirmed the duty, interest and imposed equal penalty. The appellant carried the issue in appeal and vide the order impugned herein, the Commissioner(Appeals) though upheld the demand and interest reduced the penalty. Hence these appeals.
3. On behalf of the appellant, the learned counsel Ms.A.S.K. Swetha opened her arguments adverting to definition of urban area contained in Section 2(o) of the Urban Development Act, 1975. She submitted that as per this definition, the location of Boravanipalem has not been declared as an urban area. She also argued that the Department has erred in relying upon the Gazetted Notification dt. 09/11/1977 because Boravanipalem has not been notified as an urban area as per this notification whereas it has only been specified for urbanization. She also relied upon the certificate issued by the Land Revenue Tahsildar and also the District Collector which certifies that the said area i.e. Boravanipalem village is not included in the urban area limits of Visakhapatnam Municipal Area.
4. On behalf of the Department, the learned AR Shri Arun Kumar reiterated the findings in the impugned order. He argued that as per the GO No.694 dt. 09/11/1977, Boravanipalem is specified as urban area and therefore the appellants are not eligible for the benefit under the notification.
5. I have heard both sides. The issue is whether the location of the factory of the appellant unit falls within rural area or urban area. The learned counsel for the appellant has relied upon the definition of urban area in Section 2(o) of Andhra Pradesh Urban Areas (Development) Act, 1975 which is reproduced as under:-
(i) the area comprised within the jurisdiction of the Municipal Corporation of Hyderabad or of any Municipality constituted under the Andhra Pradesh Municipalities Act, 1965 and also any such area in the vicinity as the Government may, having regard to the extent of, and the scope for the urbanization of that area or other relevant considerations specify in this behalf, by notification; and
(ii) such other area as the Government may, by notification, declare to be an urban area, which in the opinion of the Government, is likely to be urbanized.
6. It would be worthwhile to reproduce Explanation (H) contained in the notification:
(H) rural area means the area comprised in a village as defined in the land revenue records, Excluding
(i) the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee, on
(ii) any are that may be notified as an urban area by the Central Government or a State Government.
From the definition, it is seen that the urban area is to be declared by a notification by the Government and the first part of the definition speaks about specifying any area for the scope of urbanization of such area by the Government. As per the Explanation (H), a village is a rural area. Second condition of exclusion here is that the Government should notify the area as urban area. The Gazette Notification relied by Department does not notify the locality as urban area. Further, the said G.O. though issued in the year of 1977, MRO as well as Office of Collector have issued certificates stating that Boravanipalem is a village and lies in rural area. The G.O. relied by Department does not in clear terms notify the locality as an urban area as required under the second condition of exclusion in Explanation (H). The definition of urban area given in 2(o) is for the purposes of application of the said Act only. Boravanipalem might have been specified for the scope of urbanization, but there is no evidence that it is notified as urban area. The certificates issued by the Tahsildar as well as the District Collector categorically state that the location Boravanipalem does not fall under urban area. The learned counsel has relied upon the judgments laid in CCE,C&ST, Belgaum Vs. BTM Beverages Pvt. Ltd. [2016(337) ELT 383 (Tri. Bang.)] wherein it is seen that the Tribunal has held the locality to be within rural area relying upon the certificate issued by the Tahsildar. Similar view was taken in the case of CCE, Nagpur Vs. Excel Controlinkage Pvt. Ltd. [2016(332) ELT 185 (Tri. Mum.)] and CCE, Jaipur Vs. Devi Lal Kutir Shop [2015(329) ELT 367 (Tri. Del.)].
7. From the facts presented before me, I am convinced that the appellant has succeeded in establishing that the area Boravanipalem is not notified as an urban area as required under Explanation (H) of Notification No.8/2003 dt. 01/03/2003. Following the decisions in the above cases, I hold that the demand is not sustainable. The impugned orders are set aside and the appeals are allowed with consequential reliefs, if any.
(Pronounced and dictated in open court) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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