1994 (10) TMI 150 - AT - Central Excise

Summary

Issues:
Interpretation of the term 'factory' under Notification No. 93/76-C.E.
Applicability of Central Excise duty concession to premises where goods are stored.
Validity of the order-in-appeal passed by the Collector of Central Excise (Appeals), New Delhi.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi concerned the interpretation of the term 'factory' under Notification No. 93/76-C.E. and the applicability of Central Excise duty concession to premises where goods, including raw materials, are stored. The case involved M/s. Punjab Dairy Development Corporation Limited, who had obtained a heavy duty ammonia compressor under concessional rate of Central Excise duty for their milk chilling center. The Assistant Collector and the Collector of Central Excise (Appeals) had differing views on whether the term 'factory' included premises where goods used as inputs were stored.

During the hearing, the Revenue, represented by Shri B.K. Singh, argued that the premises where milk was stored did not qualify as a 'factory' and were separate from the manufacturing premises. On the other hand, Shri Arun Satija, representing the respondents, contended that the definition of 'factory' under Notification No. 93/76-C.E. was broad enough to cover their storage plant in other premises. The Collector of Central Excise (Appeals) had set aside the Assistant Collector's order and allowed the concession for the storage premises.

The Tribunal considered the facts of the case, noting that the respondents had a manufacturing factory at one location and a milk chilling center at another where raw materials were stored before being transferred to the factory. The Tribunal analyzed the provisions of Notification No. 93/76-C.E., which exempted parts of refrigeration machinery under certain conditions, including the use of such parts in specified establishments like factories.

The Tribunal highlighted that the definition of 'factory' under the notification was broader than the definition under the Central Excises and Salt Act, 1944. It emphasized that the term 'goods' in the notification encompassed a wider scope than 'excisable goods' and that the explanation explicitly referred to premises where goods are stored in relation to manufacturing. The Tribunal agreed with the Collector of Central Excise (Appeals) that even premises where goods used as inputs are stored could be covered by the concession.

Ultimately, the Tribunal rejected the Revenue's appeal and upheld the order of the Collector of Central Excise (Appeals), New Delhi, confirming the applicability of the Central Excise duty concession to the storage premises of the respondents. The decision was based on the understanding that the storage was integral to the manufacturing process and did not require proximity to the manufacturing factory as long as it was related to production.