M. Santhanam, Member (J)

1. The appeal has been filed against the orders passed by the Collector of Central Excise Customs, Pune dated 13-7-1982. The appellants are a Government of Maharashtra Undertaking duly registered under the Indian Companies Act, 1956. The management of the Corporation is carried on through the Board of Directors appointed by the Government of Maharashtra. The Corporation has units at Pune, Pachora, Nagpur and Rasayani. At Pune and Pachora Unit, some parts of Bullock carts, falling under Tariff Item No. 68, are manufactured. At Nagpur Unit, P.P. Foods and at Rasayani Unit, Fertilisers are manufactured. In respect of Pune Unit, the Corporation assembles bullock carts at various sites. The main frame, side frame, axle bracket, yoke pipe etc. are manufactured and cleared from the units at Pune and Pachora. The other parts required for assembly of bullock carts are purchased from the open market. The bullock carts are assembled at the sites of the buyers without the aid of power. Such sites are not factories within the meaning of Factories Act. The Assistant Collector (Preventive) Central Excise, issued a show cause notice that the appellants are violating various Central Excise Rules. He claimed that the appellants are manufacturing excisable goods viz. Bullock carts and demanded duty for the period 1-4-1978 to 31-3-1981. The show cause notice was issued on 23-10-1981. The appellants pointed out that the Collector had already issued a show cause notice and that a fresh show cause notice should not be issued. In reply to that show cause notice issued by the Collector, the appellants pointed out that they are not manufacturing Bullock carts in their factories. They urged that they were purchasing major parts from open market and were merely assembling the bullock carts at the sites of the customers. The Collector rejected the contentions of the appellants. Shri B.D. Deshmukh, Advocate, appearing for the appellants argued that the appellants were not manufacturing bullock-carts. He, further, pointed out that under Tariff Item No. 68 during the period 1-3-1975 to 17-6-1977, the goods should have been manufactured in a "factory" as defined in Section 2(m) of the Factories Act and that such factory must employ 50 or more workers in the case of power operated units or 100 or more workers in the case of non-power operated units. From 18-6-1977 under Notification No. 176/77, the above criterion of duty liability was changed. This notification was replaced by Notification Nos. 89/79, dated 1-3-1979, which enabled calculating the combined clearances of all factories belonging to the same manufacturer. The position continued to exist in Notification No. 105/80, dated 19-6-1980. The appellants are not manufacturers of bullock-carts at their factories at Pune or Pachora. Even otherwise the appellants are entitled to the Exemption under Notification Nos. 179/77 and 91/81. He also stated that the show cause notice was time-barred. The Collector has ignored the legal position, arbitrarily treated the appellants as manufacturer of bullock carts and imposed heavy penalty and demanded a large amount of duty without authority of law.

2. On behalf of the Deptt. Shri Khanna, S.D.R., pointed out that the clearances of both the units should be taken together in terms of Notification Nos. 176/77, 89/79 and 105/80. They were both factories under Section 2(m). The appellants never brought it to the notice of the Deptt. that the bullock carts were manufactured with their own labour at the site. He urged that the invoices mentioned about the sale of ''bullock-carts' and hence the manufacture had been made out. As many as 10,000 bullock carts were assembled and sold to factories. Since there was mis-declaration in the Classification List, suppression of materials was established and demand for duty and imposition of penalty were quite justified.

3. We have carefully gone through the matter and we find that the show cause notice issue