1999 (6) TMI 142 - AT - Central Excise

Issues involved:
- Applicability of Notification No. 103/76 and Notification No. 88/77-C.E.
- Interpretation of conditions in the notifications
- Consideration of average number of workers employed
- Submission of relevant records by the appellants
- Remand for de novo adjudication

Applicability of Notification No. 103/76 and Notification No. 88/77-C.E.:
The dispute in the appeal centered around the applicability of Notification No. 103/76 and Notification No. 88/77-C.E. The tribunal noted that the second condition of the notifications required that the total equivalent power used in the manufacturing process of footwear should not exceed 2 H.P. The appellant's factory was in the 50 H.P. category, failing to meet this condition. The argument that the word 'and' between the two conditions should be read as 'or' was rejected, emphasizing the conjunctive nature of the term 'and.' Although subsequent amendments changed 'and' to 'or' in a different notification, it did not impact the interpretation of the original Notification No. 103/76. Consequently, the tribunal held that the benefit of the notification was not applicable to the appellants due to non-compliance with the second condition.

Interpretation of conditions in the notifications:
The tribunal analyzed the language of the notifications, emphasizing the specific conditions outlined within them. It was clarified that the word 'and' between the conditions should be construed as written, without substituting it with 'or.' The tribunal highlighted that subsequent amendments affecting other notifications did not alter the original language and conditions of Notification No. 103/76. This strict interpretation led to the denial of the benefit of the notification to the appellants based on non-compliance with the stipulated conditions.

Consideration of average number of workers employed:
The dispute also revolved around the average number of workers employed by the appellants. The Commissioner had relied on a report submitted to the Directorate of Factories, which indicated a higher number of workers than what was correct. The appellant argued that this reliance was misplaced, as the declaration referred to average workers, while the notification referred to workers on any day of the preceding 12 months. The tribunal agreed with this argument, emphasizing that the number of workers during the relevant period was crucial for determining eligibility for the notification.

Submission of relevant records by the appellants:
The appellants were required to provide records such as attendance registers and wages registers to substantiate the actual number of workers employed. However, they failed to produce these records, leading to reliance on the return submitted under the Factories Act. The tribunal emphasized that the onus was on the appellants to demonstrate compliance with the notification conditions by providing necessary evidence. The failure to produce the required records impacted the adjudication process.

Remand for de novo adjudication:
In light of the issues raised regarding the reliance on submitted returns and the need for accurate records, the tribunal set aside the impugned order and remanded the matter to the Commissioner for fresh adjudication. The Commissioner was directed to base the decision on records maintained by the appellants regarding the number of workers, rather than relying solely on the Directorate of Industries' return. Additionally, the tribunal instructed the Commissioner to investigate the number of workers employed by the appellants in the 12 months preceding the relevant period to determine eligibility for the notification accurately. This remand aimed to ensure a thorough examination of the facts before reaching a final decision.

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