V. Rajamanickam, Member (T)

1. The Ld. Advocate for the appellants Shri N. Mookherjee stated that the appellants were manufacturers of iron and steel products particularly Castings, besides Spun Pipes from Steel Melting Scrap, Pig Iron etc. The castings were further processed for the purpose of repair/maintenance of the existing machineries in the factory of the petitioner at 'Burnpur'. Prior to the introduction of the new Tariff their goods were classified under Tariff Item-58 and were exempted. Since no provision was made under the new Tariff for exemption, representations were made and consequently Notification No. 281/86 dated 24-04-1986 was issued. The Notification exempts all excisable goods produced and used within the same factory or other factory of same manufacturer for repairs or maintenance of machinery. The Assistant Collector in his Order dated 29-07-1987 has come to the conclusion that the Notification refers to workshop within a factory and held that it connotes "a tool-room" sort of thing, where only the goods other than those which are primarily intended for manufacture by the factory as their prime production or one of principal raw-materials/inputs for captive consumption, are manufactured in small quantities and, therefore, denied the benefit of exemption for the products falling under Chapters 78, 80 and 84 but allowed for goods falling under Chapter-83. Shri Mookherjee, Ld. Advocate, further stated that the appellants were manufacturing steel products and for manufacture of the parts he has to make a casting. The Collector (Appeals) has also upheld the order of the Assistant Collector and has contended that the relevant goods were not manufactured in a workshop within the factory, but were manufactured in the factory where the prime products of the appellants were manufactured and as such they were not entitled to avail themselves of the exemption under Notification No. 281/86 dated 24-04-1986. For the goods manufactured, under which they claimed duty exemption, Shri Mookherjee, Ld. Advocate referred to the classification list submitted by them which were all for parts of rolling mills and parts of crane etc. and the Assistant Collector has made an endorsement that the benefit of Notification No. 281/86 is not admissible. Shri Mookherjee, Ld. Advocate, stated that the factory contained various workshops wherein these goods meant for repair and maintenance were manufactured and the view held by the Assistant Collector and the Collector (Appeals) was erroneous and the benefit of exemption should be accorded to him as the exemption was given to the appellants prior to the introduction of the new Central Excise Tariff under Tariff Item 68. A query was raised from the Bench as to whether he was enjoying the benefit of Notification No. 118/75, the Ld. Advocate stated that they were enjoying the Notification which was meant for exemption of goods used in the factory of production or in any other factory of the same manufacturer.

2. The Ld. S.D.R., Shri K.D. Tayal, contended that the Notification refers to excisable goods manufactured in a Workshop within a factory and it cannot cover the goods manufactured in the entire factory. He stated that the term "factory" has been defined in the Central Excises Act, Section 2(e) as :

"Factory means, any premises including the precincts thereof wherein or in any part of which excisable goods other than salt or manufactured or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried out on or is ordinarily carried out."

Whereas a Workshop has not been defined under the Act but the following are the definitions:-

(i) "A room, apartment or building in which manual or industrial work is carried out."

(Page - 2572 - The Shorter Oxford English Dictionary on historical principles -1980 Edn.)

(ii) "A room or place (e.g. in a factory) in which manufacture or repair work is carried out, 2. A work room."

(Page 1741 - Longma