Benefit of Exemption Notification can’t be denied on grounds of Whims and Fancies without Documents: CESTAT [Read Order]

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the benefit of an exemption notification cannot be denied on grounds of whims and fancies without the support of documentary evidence.

The appellant is a manufacturer of “handmade laundry soap without the aid of power” falling under CSH 3401 1942 of the Central Excise Tariff Act, 1985, is registered as a Women’s Society under the Tamil Nadu Societies Registration Act, 1975. The department was of the view that by concluding that the society was fake and therefore, not eligible for the benefit of Notification No. 88/88-C.E.

The Tribunal comprising Judicial Member Mr. P Dinesha and Technical Member Mr. P Anjani Kumar observed that the Women’s Society comes under the inclusive clause “including women’s societies” and by this, we find that the appellant has even satisfied the inclusive part of the definition as well.

“By these, we can safely conclude that the denial of benefit of exemption is patently wrong and unsustainable,” the Tribunal said.

“We are surprised to note that when the appellant is focusing on achieving its objective by keeping a low profile, the allegations in the Show Cause Notices, which tantamount to publicity, is not the requirement of the Notification and to deny a benefit consequently, is arbitrary and unsustainable. When primary documents issued by Government agencies like the certificate of registration under the Tamil Nadu Societies Registration Act, certificate of the Village Officer and that of the Tehasildar speak for themselves, we do not need more than these basic documents to establish the status or location of the appellant. Unfortunately, only grave allegations are made, but no supporting documentary evidence is relied upon by the authority who issued the Show Cause Notice,” the Tribunal said.

While concluding the order in favour of the assessee, the Tribunal held that “accordingly, we are of the clear view that the denial of benefit of Notification No. 88/88-C.E. dated 01.03.1988 has been made on whims and fancies and without there being the support of any documentary evidence and hence, the same cannot be sustained.”

To Read the full text of the Order CLICK HERE

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