S. Duggal, Member (J)

1. The question, falling for determination in this appeal, filed before the Tribunal under Section 35B of the Central Excises and Salt Act, 1944, falls within a very short compass. The appellants, who are manufacturers of link chains, an excisable item under Tariff Entry 68 of the Central Excise Tariff (C.E.T. for short), effected clearances without payment of any excise duty during certain period, availing benefit of exemption notifications, being firstly, Notification No. 89/79, dated 1-3-1979, replaced later by Notification No. 105/80 dated 19-6-1980. The period in dispute, so far as the present appeal is concerned, relates to clearances effected between 1-8-1980 to 30-3-1981, during which period the notification under operation, namely, No. 105/80 exempted goods falling under Tariff Item 68 if the total turnover of the manufacturers did not exceed Rs. 30 lakhs, and the total capital investment towards Plant and Machinery installed, did not exceed Rs. 10 lakhs.

2. As a sequel to a visit of appellant's factory by Range Superintendent, on 5-8-1981, a notice to show cause was issued to the appellants, calling upon them to show cause as to why excise duty amounting to Rs. 1,40,304.62 P be not recovered from them for clearances effected during 1-8-1980 to 31-3-1981, on the ground that the inspection of their records during the visit on 5-8-1981, revealed their total capital investment in Plant and Machinery to be in excess of Rs. 10 lakhs, as contemplated by the Notification No. 105/80, and thus, rendering them not entitled to the exemption effected by the said notification.

3. The appellants controverted the allegations by filing reply, but the Assistant Collector by order dated 31-10-1981, held that the capital investment of the appellants made from time to time on Plant and Machinery, exceeded Rs. 10 lakhs, during the financial year 1980-81 and thus clearances effected during that period were liable to excise duty.

4. The appellants filed an appeal to the Appellate Collector of Central Excise and Customs, assailing the findings of the Asstt. Collector, and reiterated that the audited accounts produced by them clearly showed that their total investment fell, well within the ceiling of Rs. 10 lakhs, asserting that they were entitled to the exemption allowed by Notification No. 105/80. This appeal was disposed of by the Collector (Appeals), Central Excise, Calcutta, by order dated 5-3-1983 ; whereby, after reproducing the contentions of the appellants and after taking note of the audited reports, filed by the Appellants, as verified by their Chartered Accountant, he dismissed the appeal.

5. It is this order, which is impugned in the present appeal, and the appellants contend that the Collector (Appeals), had gone wrong in including the cost of the 'buildings' towards the amount of capital investment on 'Plant and Machinery'. They asserted that the term 'buildings' have an entirely different concept than 'Plant' and 'Machinery'. It is further urged that the controversy before the Collector (Appeals), was confined to the question as to whether the amount spent by the appellants towards purchase of materials for construction of, what they describe to be a 'Heat Chamber', could be accounted towards the cost of the investment on "Plant and Machinery installed", within the contemplation of the notification, under reference. It is, thus, pleaded that the Order-in-Appeal, is manifestly erroneous, having gone beyond the subject matter of the appeal before the Collector (Appeals), and in violation of principles of natural justice, inasmuch as this finding has been recorded without any notice to the appellants, and without same being in issue.

6. Shri C.L. Beri, Advocate, appeared for appellants at the time of hearing, whereas the respondent was represented by Shri V. Lakshmikumaran, SDR. Shri Beri, at the outset laid stress on the fact that the finding of the Collector (Appeals), was without jurisdiction, inasmuch as,