1994 (10) TMI 61 - SC - Central Excise

Whether appellants entitled for benefit under Notification No. 88 of 1977- C.E., dated 9-5-1977? Held that - The benefit of the Notification in view of proviso (i) can be extended only to such manufacturers in whose factory including the precincts thereof, not more than 49 workers are working on any day of the preceding 12 months. As within the precincts of the factory more than 49 workers were working including the workers of M/s. Stepwell Industries, the appellant shall not be entitled to the benefit of the Notification. Against assessee.

Summary

Issues:
Claim for benefit under Notification No. 88 of 1977-C.E. based on the number of workers directly employed by the appellant and M/s. Stepwell Industries Limited.

Analysis:
The appellant, a footwear manufacturer, partially outsourced manufacturing to M/s. Stepwell Industries Limited as per an agreement. The Collector of Central Excise determined the appellant was not eligible for the benefit of Notification No. 88 of 1977 due to the combined workforce exceeding 49 individuals. The Customs, Excise & Gold (Control) Appellate Tribunal upheld this decision, considering workers from both factories. The notification exempted footwear production from excise duty if done in factories with up to 49 workers or 2 Horse Power. The appellant argued that only workers in their factory should count for eligibility. However, the agreement revealed M/s. Stepwell Industries operated within the appellant's premises, using their machinery and electricity, making their workers count towards the total. As more than 49 workers were present within the factory precincts, the appellant was deemed ineligible for the notification's benefit. The court concurred with the lower authorities' decision, denying the appellant the benefit of the notification. The appeal was dismissed without costs.