1999 (12) TMI 307 - AT - Central Excise

Summary

Issues:
1. Availability of benefit under Notification No. 46/81-CE to M/s Jyoti Refinery.
2. Employment of workers and eligibility for duty exemption.
3. Utilization of services from other units.
4. Demand for duty amounting to Rs. 2,42,35,598.72.
5. Interpretation of the term "factory" under the Factories Act.
6. Tribunal's findings on the definition of "factory" and exemption eligibility.

Analysis:
1. The central issue in this appeal was whether M/s Jyoti Refinery was entitled to the benefit of Notification No. 46/81-CE. The appellant argued that the respondents were employing more than 9 workers, thus disqualifying them from the exemption.

2. The facts revealed that M/s Jyoti Refinery claimed duty exemption under the notification by stating they had only six workers. However, during an investigation, it was found that a total of 20 workers were actually working, including those from other units on the same premises. A show cause notice was issued for demanding duty amounting to Rs. 2,42,35,598.72.

3. The appellant contended that the respondents used other companies as a front to hide the employment of more than 9 workers, leading to the wrongful availment of exemptions under various notifications for different materials.

4. The respondents argued that an earlier appeal had been successful in setting aside the order treating their unit as a factory under the Factories Act. They claimed that since the appeal was allowed, the demand for duty for an extended period should not be enforced.

5. The Tribunal's order highlighted that the definition of "factory" under the Factories Act was crucial for determining eligibility under the exemption notification. Certificates from authorities confirmed that the units did not fall within the definition of "factory" as per the Act.

6. The Tribunal's findings emphasized that the Department could not consider individuals coming for repair jobs as workers for the purpose of determining factory status. Witnesses did not support the Department's case, leading to the conclusion that the demand for duty based on the respondents falling within the definition of "factory" was unfounded. As the Tribunal ruled that the respondents were not a factory as defined in the Factories Act, the demand for an extended period was deemed unnecessary, resulting in the rejection of the revenue's appeal.