1990 (2) TMI 217 - AT - Central Excise

Summary

Issues Involved:

1. Whether the factory closure due to a tool-down strike qualifies as "closure" under Notification No. 283/82-CE.
2. Whether the appellants are entitled to the full credit claimed under Rule 56-AA despite the strike period.

Issue-wise Detailed Analysis:

1. Whether the factory closure due to a tool-down strike qualifies as "closure" under Notification No. 283/82-CE:

The appellants, M/s. Swadeshi Polytex Ltd., claimed higher production concession under Rule 56-AA for the year ending February 1983. The Assistant Collector partially rejected the claim, considering the factory closed during a 45-day tool-down strike in 1981, which affected the base period calculation. The appellants argued that the factory was not "closed" as essential operations like steam generation and electricity production continued, and staff remained on duty. The Assistant Collector and the Collector (Appeals) held that the lack of production/clearance during the strike period amounted to closure.

The Tribunal examined the definition of "closure" and "strike" under the Industrial Disputes Act, 1947, noting that "closure" implies a permanent shutdown, whereas a "strike" is a temporary cessation of work by employees. The Tribunal emphasized that the Notification No. 283/82-CE pertains to clearances rather than production. It concluded that the factory was not "closed" during the strike since essential operations continued, and the staff was on duty. Therefore, the period of the tool-down strike should not be considered as closure.

2. Whether the appellants are entitled to the full credit claimed under Rule 56-AA despite the strike period:

The appellants claimed credit of Rs. 56,17,152.67, which was partially allowed by the Assistant Collector, granting Rs. 25,22,938.50. The Collector (Appeals) adjusted the closure period to 43 days, excluding 8th and 9th September 1981. The Tribunal found that the authorities erred in considering the factory closed during the strike period, as essential operations continued, and the staff was on duty. Consequently, the Tribunal held that the appellants are entitled to the full credit claimed under Rule 56-AA.

Conclusion:

The Tribunal set aside the impugned orders, allowing the appeal with consequential relief, thus granting the appellants the full credit claimed under Rule 56-AA.