1. Government Ceramic Service Centre, Mangattuparamba, Cannanore, hereinafter referred as the G.S.C. filed a Revision Application dated 13th October 1979 before the Central Government on 15th October 1979 against the Order No. 748/79 dated 29-5-1979 passed by the Appellate Collector of Customs and Central Excise, Madras. The said application has been transferred to the Tribunal under Section 35-P of the Central Excises and Salt Act, 1944, and is being disposed of as such.
2. The G.S.C. was started in the year 1963. For effective management of the Unit which belongs to the Government of Kerala, it was transferred to M/s Kerala State Small Industries Corporation/ Limited by Notification No. GS (MS)-608/IND dated 16-8-1963 on terms and conditions contained therein.
3. Subsequently, a new Company by name M/s Kerala State Small Industries Development and Employment Corporation Limited (a wholly Government owned Company under the provisions of the Companies Act) was incorporated, which took over the Kerala State Small Industries Corporation Ltd. 4. The products manufactured in the Unit were chinaware and porcelain-ware, more particularly described as table-ware (cups and saucers), sanitary ware, etc. These items were respectively classifiable under Tariff Item 23 B1, 23 B2 and 23 B4. The value of the goods cleared during the financial year 1977-78 was Rs. 16,917.51. No other Unit of the Government was manufacturing the said items of goods.
The estimated value of the goods cleared for the year 1978-79 was Rs 2,43,000.
5. The G.S.C. filed a detailed declaration in the prescribed form before the Superintendent of Central Excise, Baliapatam, Cannanore, Kerala claiming exemption as per Notification No. 71/78 as amended. The Assistant Collector, however, by his Order dated 3-10-1978 declined to grant exemption as prayed for on mis-conception of the fact that the goods manufactured by the Kerala Ceramics Limited, Kindara which was entirely a different Company incorporated under the Companies Act, had to be clubbed with the turnover of the G.S.C. which is the appellant before us. According to the Assistant Collector, since the aggregate value of goods cleared by the petitioner and the said company was in excess of the limits prescribed for eligibility for exemption under Notification No. 71/78, the appellant was not entitled to exemption.
Since the G.S.C. and the Kerala Ceramics Limited, Kindara were two different legal entities, the simple fact that these were owned by the Government of Kerala could not make them one Unit as viewed by the Revenue. Therefore, without any hesitation, we hold that the Appellate Collector wrongly confirmed the order of the Assistant Collector. Since there is no dispute that if the turnover of the G.S.C. is viewed independently, it would be entitled to exemption under Notification No.71/78, we hold that the appellant was entitled to exemption. Therefore, allowing the Appeal, we direct consequential relief within three months of the receipt of this Order.