1995 (4) TMI 186 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification 46/81 for exemption from Central Excise duty.
2. Determining the eligibility for exemption based on the place of manufacture.
3. Whether a unit with less than 10 workers can qualify for exemption under the notification.

Analysis:
The case involved a dispute regarding the applicability of Notification 46/81 for exemption from Central Excise duty to goods manufactured in a separate unit. The appellants had a factory in Sector 1 and another unit in Sector 2 of Parwanoo, Himachal Pradesh. The Assistant Collector and the Collector of Central Excise (Appeals) held that the unit in Sector 2 was not eligible for exemption as it was considered part of the main factory in Sector 1.

The appellants argued that the exemption under Notification 46/81 should be granted based on the place of manufacture, not the entity manufacturing the goods. They cited previous Tribunal decisions to support their claim. The Department contended that the unit in Sector 2 had no separate legal existence and was dependent on the main unit, thus not qualifying for exemption under the notification.

The Tribunal analyzed the provisions of Notification 46/81, which exempt goods manufactured in premises other than a factory as defined in the Factories Act, 1948. Referring to previous Tribunal decisions, the Tribunal emphasized that the exemption is available to any premises employing less than 10 workers, irrespective of ownership or interdependence with other units. The Tribunal highlighted that the exemption is based on the place of manufacture, not the manufacturer.

The Tribunal distinguished the present case from the Cothas Prakash case cited by the Department, emphasizing that the units in question were not carrying out interdependent manufacturing activities. Relying on past decisions, the Tribunal concluded that the goods manufactured in the unit at Sector 2 employing less than ten workers were eligible for exemption under Notification 46/81. The Tribunal allowed the appeal, overturning the lower authorities' decision to deny the exemption based on the unit's relationship with the main factory.