2000 (11) TMI 187 - AT - Central Excise

Summary

Issues involved:
1. Availability of exemption under Notification No. 63/95-C.E. to goods manufactured in a workshop.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Court No. II, New Delhi involved the issue of whether the exemption contained in Notification No. 63/95-C.E. applied to goods manufactured in a workshop located in Korba. The appeal was taken up for disposal with the consent of both parties as the issue was narrow in scope. The central question was whether the workshop, declared as a mine by the Central Government, fell within the ambit of the exemption notification.

The appellant's consultant argued that the workshop was declared a mine under the Mines Act, and thus, goods produced in the workshop were eligible for the exemption. Reference was made to a previous Tribunal decision that extended a similar benefit to goods produced in a workshop catering to multiple mines under the same management. The consultant emphasized that the workshop only supplied goods to mines owned by the appellant and not subsidiaries, and registration under the Factories Act should not impact the eligibility for exemption.

In contrast, the Department's representative contended that the workshop, registered under the Factories Act, did not qualify as a mine under the Mines Act. The exclusion clause in the Factories Act supported this argument, stating that a factory does not include a mine subject to the Mines Act. The Department highlighted that the workshop was not covered under the Mines Act based on official certifications.

After considering both sides' submissions, the Tribunal concluded that the goods manufactured in the workshop were not eligible for the exemption under Notification No. 63/95-C.E. The workshop's registration under the Factories Act precluded it from being considered a mine under the Mines Act, thus rendering it ineligible for the exemption. The Tribunal upheld the demand for excise duty but set aside the penalty imposed on the appellant due to the specific circumstances of the case.

In summary, the Tribunal ruled that the exemption did not apply to the goods produced in the workshop due to its registration under the Factories Act, thereby upholding the excise duty demand while waiving the penalty. The judgment clarified the distinction between a workshop registered under the Factories Act and a mine under the Mines Act, emphasizing the specific exclusion of mines from the definition of factories under relevant statutes.