1992 (8) TMI 199 - AT - Central Excise

Summary

Issues:
- Eligibility for exemption under Notification No. 37/87-C.E.
- Interpretation of inter-dependence between two units
- Application of Industries (Development and Regulation) Act, 1951 in exemption notification
- Compliance with CEGAT order
- Existence of separate mines, conveyor belt, and railway siding for Chittor Cement Works

Eligibility for Exemption under Notification No. 37/87-C.E.:
The case involved a dispute regarding the eligibility of the respondents for exemption under Notification No. 37/87-C.E. The respondents, holding L4 Licence No. l/Cement/67, submitted a revised classification list claiming exemption effective from 1-3-1987. The Collector (Appeals) initially set aside the Assistant Collector's order and remanded the case for further adjudication. The subsequent appeal by the Collector of Central Excise, Jaipur to CEGAT was dismissed, upholding the order of the Collector (Appeals). The issue revolved around whether the respondents were eligible for the exemption under the notification.

Interpretation of Inter-Dependence between Two Units:
The main contention was the inter-dependence between Chittor Cement Works and Birla Cement Works. The Assistant Collector observed common facilities, such as a conveyor belt and railway siding, indicating inter-dependence. However, the respondents argued that the conveyor belt was designed to carry materials from the new unit to the old one, demonstrating independence. The argument focused on the physical separation and operational independence of the two units, essential for determining eligibility for the exemption.

Application of Industries (Development and Regulation) Act, 1951 in Exemption Notification:
The dispute also involved the application of the Industries (Development and Regulation) Act, 1951 in interpreting the exemption notification under the Central Excises & Salt Act, 1944. The Collector (Appeals) and the parties debated whether the provisions of the Act should influence the interpretation of the exemption notification, emphasizing the legal framework governing industrial development and regulation.

Compliance with CEGAT Order:
The issue of compliance with the earlier CEGAT order dated 5-10-1989 was raised, as the Collector of Central Excise, Jaipur had appealed against it to the Supreme Court. The Delhi High Court directed compliance with the CEGAT order within a specified timeframe, leading to further inspections and adjudications by the Assistant Collector to determine the eligibility of the respondents for the exemption.

Existence of Separate Mines, Conveyor Belt, and Railway Siding for Chittor Cement Works:
The physical observations made by the Assistant Collector regarding the Chittor Cement Works highlighted the absence of separate mines in its name, a common conveyor belt connecting the two units, and the lack of a separate railway siding. These observations played a crucial role in determining the operational and functional independence of Chittor Cement Works from Birla Cement Works, influencing the decision on eligibility for the exemption under Notification 36/87. The presence of separate facilities and infrastructure was a key factor in establishing the autonomy of Chittor Cement Works as a distinct entity deserving of the exemption.