Per Shri V.P. Gulati :

The issue in the appeal relates to the benefit of Notification No. 172/89, which reads as under :

Notification No. 172/89 dated 1.9.89:

In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts cement falling under sub-heading No. 2502.20 of the Schedule to the Central Excise Tariff Act 1985 (5 of 1986) and manufactured in a factory.

a) Using vertical shaft kiln with a licensed capacity not exceeding 200 tonnes per day or using rotary kiln with the licensed capacity not exceeding 300 tonnes per day from so much of the duty of the excise leviable thereon under the said Schedule as in excess of the amount calculated at the rate of Rs. 115/- per tonne.

b) Provided that nothing contained in this notification shall apply to such cement in respect of which a manufacturer avail of the exemption contained in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 175/86-Central Excises, dated the 1st March 1986.

The plea of the appellants is that so long as the appellants are able to show that the capacity of the kiln installed in their factory is 200 tonnes for the vertical shaft kiln the appellants should be given the benefit of this notification. The Revenue however is of the view that the capacity to be taken into reckoning should be the production capacity of the factory for cement and not the capacity of the kiln for production of Clinker. The appellants have been denied the benefit of Notification on this view.

2. The learned Sr. Advocate for the appellants has referred used to the predecessor notifications to bring out the intention of the notification in question. He has pleaded the predecessor notifications for the purpose of the benefit in question are Notification No. 23/89 dated 1.3.1989 and Notification No. 123/89 dated 27.4.1989. He has pleaded that in these notifications the wordings used are "using vertical shaft kiln with total licencing capacity not exceeding 200 tonnes" and "with the total licencing capacity not exceeding 200 tonnes per day respectively. He has pleaded that in the notification in question there is a significant change in the wordings and Clause (a) what is stated is "using vertical shaft kiln with licencing capacity not exceeding 200 tonnes.......". He has pleaded these wordings only go to show that it is the licencing capacity of the kiln which has to be taken into reckoning and not the licencing capacity of the factory. On a query from the Bench he fairly conceded that if the capacity of the kiln is taken into reckoning that would mean the limit upto which the clinker can be produced for the purpose of notification. He has pleaded inasmuch as the vertical shaft kiln installed in the appellants' unit at a production capacity of the clinker not exceeding 200 tonnes per day, the appellants would be entitled to the benefit of the notification. On this point the learned Sr. Advocate was asked to enlighten the Bench as to the methodology for licencing the capacity both of the plant or factory and the kiln as such. He has pointed out that for the production of cement the commodity in question requires a licence from the Government of India under the industries (Development and Regulation) Act, 1951 as amended from time to time. In that said Act, he pleaded, the term `factory' and `industrial undertaking' have been defined and the licencing is provided for under Section 11 and 11A read with Section 11B and Section 13 wherever required. He has pleaded that the Government for the purpose of production and in public interest specifies the place and capacity for which the plant could be set up. He however could not point out that there was a mechanism for certifying the capacity of the individual components in a plant or there is any requirement in that regard in the said A