1985 (4) TMI 292 - AT - Central Excise

Issues Involved:
1. Entitlement to the benefit of Notification No. 80/80-C.E., dated 19-6-1980.
2. Claim for exemption under Notification No. 167/71, dated 11-9-1971.
3. Classification of goods under Tariff Item No. 51-A versus residuary Item 68.

Detailed Analysis:

1. Entitlement to the benefit of Notification No. 80/80-C.E., dated 19-6-1980:
The appellant, a society registered under the Societies Registration Act, 1860, claimed exemption under Notification No. 80/80-C.E., which exempts excisable goods cleared for home consumption by small-scale units. The Collector of Central Excise denied this exemption, equating the Society to the Government of India and thus not qualifying as a small-scale manufacturer.

The Tribunal examined the appellant's registration certificate, Memorandum of Association, and Rules and Regulations. It found that the Society, though funded partly by the Government of India, operates as an independent juristic entity with its own management and financial administration. The Tribunal referred to several legal precedents, including AIR 1970 Patna 163 and AIR 1950 Allahabad 480, which established that a society registered under the Societies Registration Act enjoys a legal status separate from its members and is capable of suing or being sued.

The Tribunal concluded that the appellant cannot be considered "Government" and is therefore entitled to the exemption under Notification No. 80/80-C.E. as a small-scale unit.

2. Claim for exemption under Notification No. 167/71, dated 11-9-1971:
Notification No. 167/71 exempts excisable goods produced in a technical, educational, and research institute in the course of training. The appellant claimed that the tools produced in their Tool Room during training activities should be exempt under this notification.

The Tribunal found that the appellant provides consultancy services and manufactures tools according to commercial specifications, indicating that the goods were not produced solely in the course of training. Additionally, the appellant failed to produce evidence required by the Collector to verify that the goods were produced during training. Thus, the Tribunal upheld the lower authorities' decision that the appellant does not qualify for the exemption under Notification No. 167/71.

3. Classification of goods under Tariff Item No. 51-A versus residuary Item 68:
The appellant contended that the jigs and fixtures manufactured should be classified under residuary Item 68 instead of Tariff Item No. 51-A. However, this argument was not raised before the lower authorities or in response to the show cause notice.

The Tribunal held that the appellant is not entitled to raise this new classification plea at this late stage, as it was not part of the original proceedings.

Conclusion:
The appeal was allowed, recognizing the appellant as a small-scale unit entitled to the exemption under Notification No. 80/80-C.E. The claim for exemption under Notification No. 167/71 was denied, as the goods were produced commercially and not solely during training. The cross-appeal regarding the classification of goods was dismissed as it was raised too late in the proceedings.

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