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1. ST/00023/2011 M/s. Mahasemam The Commissioner of Trust Central Excise, Central Revenue Buildings, Madurai

2. ST/00118/2011 The Commissioner M/s. Mahasemam of Central Excise, Trust Central Revenue Buildings, Madurai (Arising out of Order-in-Original No. 1/2010 ST dated 23.11.2010 passed by The Commissioner of Central Excise, Central Revenue Buildings, Madurai) Appearance:-

2.1 On behalf of the assessee, the Ld. Counsel Shri. G. Natarajan appeared and argued the matter. He submitted that the assessee namely, M/s. Mahasemam Trust, is a Public Charitable Trust formed vide Trust Deed dated 07.07.1999. The Trust is established with the broad objective of eradicating poverty and improving the social status and self-esteem of rural women and to reduce problems such as violence and exploitation. In order to carry out the above objectives, the assessee-Trust is enrolling rural women as members and form various groups of such women. It is also functioning as a Federation of Women Groups, working for the benefit of the members. One of the important activities undertaken by the Trust is granting revenue generating (to set up appropriate revenue generating business for the members) as well as non-revenue generating (to meet expenses of festivals, emergency loans, housing loans, destitute loans, etc.) loans to its members. The assessee obtains such loans from various banks and uses these funds to grant loans to their members. The loans are for small amounts to help the eligible women members to enable them to find a livelihood like rearing cattle, setting up petty shops, handicrafts, etc. The loans are sanctioned in periodical meetings of the members as decided between the members and the loans are not sanctioned by the Trust as such. The obligation of repayment of the loan is also cast on the group and if any one member of the group defaults in repayment, the other members of the group are liable to repay the same and this ensures peer responsibility on the group to ensure repayment. Thus, the loans are not disbursed as in normal banking activities. Weekly meetings of the members are conducted to promote various objectives of the Trust. Loans carry interest which are prescribed by the Trust. At the time of disbursement of loans, certain nominal amounts are collected from the beneficiaries on voluntary basis for various purposes. The appellant also collects small amounts of deposits from their members to inculcate the savings habit and even Rs. 10/- are accepted as deposits. But no facilities like withdrawal through cheque, etc. are offered against such deposits. The savings can be withdrawn only upon cessation of membership and not before. Small amounts are collected for the purpose of group formation and maintenance, training expenses, health care, legal care, educational scholarship, insurance, etc. These amounts are allocated for specific purposes.