Full Judgment
2. Appellant is a proprietary concern. It is alleged that it is located in a rural area. The product manufactured by it is laundry soaps. It has got approval from Khadi and Village Industries Commission. Laundry soaps produced by the appellants were sought to be assessed to excise duty. Proposed action of the excise authorities was opposed on the ground that tariff entry 3401.13 fixed nil duty for laundry soaps produced in such organisation and also that General Exemption No. 12 issued by the Central Government exempt goods from duty in case tariff entry 3401.13 is not found to cover the product. This contention raised by the appellant was rejected by the Assistant Collector by Order-in-Original No. 147/CD/1999-2000 dated 24-3-2000. Assistant Commissioner took the view that laundry soap manufactured by the assessee is classifiable under Chapter Heading 3401.11 and chargeable to central excise duty accordingly. The matter was taken up in appeal.
That appeal happened to be dismissed by the Commissioner (Appeals) as per Order-in-Appeal No. 910 (KDT) CE/JPR-II/2000, dated 25-8-2000.
3. In this appeal the main argument advanced by the learned Consultant representing the appellant is that the assessee's product is falling under tariff entry 3401.13 and, therefore, the duty liability is nil.
Alternate contention raised by him is that in any circumstance the assessee must be entitled to the benefit of Notification No. 88/88-CE., dated 1-3-88. We shall proceed to deal with this contention hereinbelow.
"Laundry soaps produced by a factory owned by the Khadi and Village Industries Commission or any Organisation approved by the said Commission for the purpose of manufacture of such soaps" (b) factory owned by any organisation approved by the said Commission.
The assessee has no case that his factory is owned by Khadi and Village Industries Commission. Nor has he got a case that the unit belonging to him is owned by any organisation. It is owned by himself. It is his own proprietary concern. A plain reading of the tariff entry makes it clear that only laundry soaps produced by a factory owned by an organisation approved by the Khadi and Village Industries Commission will fall under that tariff heading. Since the unit is not owned by any organisation, according to us the assessee's unit where laundry soaps are produced cannot claim that goods produced fall within the tariff entry 3401.13.
5. Exemption Notification 88/88-C.E. dated 1-3-88 deals with goods manufactured in rural areas by registered co-operative societies, or by women's societies, or by institutions recognised by Khadi and Village Industries Commission or the State Khadi and Village Industries Boards or by unit run with the cash assistance from District Rural Development Agencies. Appellant before us has no case that his unit is one run with the cash assistance from District Rural Development Agencies. The only case advanced by him is that his unit must be treated as an institution recognised by Khadi and Village Industries Commission or State Khadi and Village Industries Board, which is the third category mentioned in the notification. The first two categories are Co-operative Society or Women's Society. Since the third category is preceded by the above two types of society, the third category, viz., institutions must also take its colour from the preceding two categories. In other words, the third category must be understood ejusdem generis with the first two. If so understood, the unit owned by an individual cannot come within the purview of "institutions recognised by the Khadi and Village Industries" mentioned in Notification 88/88. In this view we do not find any merit in the contention advanced by the learned Consultant for the appellant that the appellants unit is entitled to the benefit of exemption Notification 88/88.
6. Lastly, learned Representative on behalf of the appellant raised yet another ground based on the departmental clarification issued by the Commissioner of Central Excise and Customs, Cochin in Trade Notice No.2/96 dated 3-1-96. That trade notice was in relation to the meaning of "rural area" in notification No. 88/88-C.E. The doubts clarified therein was whether units functioning in areas comprised in a village with a population above ten thousand will be entitled to the benefit of the notification or not. Since the issue on hand has nothing to do with the meaning of "rural area", the said trade notice has no relevance. So the appellants cannot have any benefit on the basis of trade notice.
7. In view of what has been stated above, we find no merit in this appeal. The appeal is accordingly dismissed.