1991 (9) TMI 233 - AT - Central Excise

Summary

Issues Involved:
1. Exemption under Notification 118/75-C.E.
2. Ownership and location of the manufacturing premises.
3. Applicability of Central Excise Rules.
4. Relevance of previous judicial decisions.

Detailed Analysis:

1. Exemption under Notification 118/75-C.E.
The core issue was whether the steam manufactured in the boilers erected by the appellants in areas excluded from the sugar mills' ground plans was entitled to exemption from duty under Notification 118/75-C.E., dated 30-4-1975. The notification provides two conditions for exemption: (a) the goods falling under item 68 should be manufactured in a factory, and (b) (i) should be intended for use in the factory in which they are manufactured or (ii) should be intended for use in any other factory of the same manufacturer. The Tribunal concluded that since the areas where the boilers were erected were excluded from the sugar mills' factory premises, the steam did not meet the conditions for exemption under the notification.

2. Ownership and Location of the Manufacturing Premises
The Tribunal examined whether the areas where the boilers were erected remained part of the sugar mills' factory premises. The sugar mills had requested the exclusion of these areas from their ground plans to provide space for the appellants to construct coal-fired boilers. This exclusion meant that the areas were no longer part of the sugar mills' factory premises. The Tribunal emphasized that the manufacturing premises described in the licence must be adhered to as per Central Excise Rules, and the exclusion indicated that the steam was manufactured in a separate factory owned by the appellants, not the sugar mills.

3. Applicability of Central Excise Rules
The Tribunal referred to various Central Excise Rules, including Rules 174, 176, and 178, which require a manufacturer to declare the premises used for manufacturing excisable goods. The sugar mills had excluded the areas where the boilers were erected from their factory premises in compliance with these rules. This exclusion was crucial in determining that the steam was manufactured in a separate factory, thus not qualifying for the exemption under Notification 118/75.

4. Relevance of Previous Judicial Decisions
The appellants cited several judicial decisions under the Employees' State Insurance Act and the Factories Act to support their claim that the steam was manufactured within the sugar mills' factory premises. However, the Tribunal held that these decisions were not relevant for interpreting an exemption notification under the Central Excises & Salt Act. The Tribunal emphasized that exemption notifications must be interpreted in their plain meaning, and the conditions of Notification 118/75 were not met in the present appeals.

Conclusion:
The Tribunal concluded that the steam manufactured in the boilers erected by the appellants in areas excluded from the sugar mills' ground plans did not qualify for exemption under Notification 118/75-C.E. The areas were no longer part of the sugar mills' factory premises, and the steam was manufactured in a separate factory owned by the appellants. The appeals were rejected, and the amounts of duty demanded in the three impugned orders were upheld.