1983 (8) TMI 295 - AT - Central Excise

Summary

Issues:
Interpretation of exemption Notifications related to the number of workers employed in a factory; Classification of goods under Tariff Heading 68; Applicability of Gujarat High Court judgment on goods manufacturing; Entitlement to exemption from excise duty based on Tariff Entry exclusion.

Analysis:
The case involved a dispute regarding the entitlement to the benefit of exemption Notifications related to the number of workers employed in a factory during specific periods. The appellants contested that certain categories of employees should not be considered as "workers" for the purpose of the Notifications. The Department disagreed, leading to the impugned Order-in-Appeal that found the number of workers exceeded 49 for certain periods, thus denying exemption for those periods (1975-76 and part of 1976-77).

During the appeal, the appellants raised a new legal point based on a judgment by the Gujarat High Court, arguing that the goods they manufactured should not be classified under Tariff Heading 68. The appellants claimed that the goods were exempt from excise duty under a specific Tariff Entry and should not fall under the residuary Item 68. The appellants relied on the Gujarat High Court judgment to support their argument.

The Tribunal considered the legal argument presented by the appellants and found merit in their claim. The Tribunal agreed with the interpretation of the Gujarat High Court judgment, stating that goods specifically mentioned in a Tariff Entry, even by way of exclusion, should not be classified under the residuary Item 68. The Tribunal concluded that the goods manufactured by the appellants were statutorily exempt from excise duty under a specific Tariff Entry exclusion, and therefore, the appellants were entitled to exemption without relying on any other Notification.

The Departmental Representative attempted to argue a distinction between "articles of hosiery" and "hosiery garments," but the Tribunal rejected this argument, noting that the items in question before the Gujarat High Court were the same items manufactured by the appellants. The Tribunal held that based on the Gujarat High Court judgment, the goods were exempt from excise duty and did not need to meet the conditions of any other Exemption Notification. Consequently, the appeal was allowed, and the appellants were granted consequential relief by way of refund, if applicable.