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TMI Blog1996 (4) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... nents based on the customers requirements and was catering to the needs of all the Units of the appellant situated in Calcutta and Uttar Pradesh. The appellant was clearing the said towers without payment of duty of excise and without taking out any licence. The appellant s Unit was visited by Central Excise Officers who seized five FRP Towers on the reasonable belief that the appellant was required to pay duty on their final product after observing all the requisite Central Excise formalities. Various records and documents were taken into possession and the statements of Marketing Director and other officers were recorded. 3. Based upon the above facts, the appellant was issued a show cause notice dated 1-4-1986 by the Collector, Central Excise, Calcutta-I proposing to confiscate the seized towers; to confirm the demand of duty of Rs. 5,77,898.89 on the FRP Cooling Towers classifiable under erstwhile Tariff Item 68 cleared during the period - March, 1984 to December, 1985 and proposing imposition of penalty. The said show cause notice, after due adjudication, culminated into the impugned order which is under challenge before us. 4. We have heard the learned Consultant for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 179/77-C.E. and hold that the benefit thereunder has been rightly rejected by the learned Collector. 6. As regards the second issue i.e. the appellant s claim of exemption under Notification No. 46/81-C.E. on ground of their being a non-factory, we observe that in view of our finding on the use of power in the preceding paragraphs, the definition of factory as appearing in Section 2(m)(i) and not under Section 2(m)(ii) of the Factories Act, 1948 would apply. As such, the number of workers in the appellant s Unit ought to be less than 10 to earn the exemption as contained in the Notification in question. The term `worker , has further been defined in Section 2(l) of the Factories Act. Section 2(m)(i) and 2(l) of the Factories Act, 1948 are reproduced below for the sake of ready reference :- 2(m) - factory means any premises including the precincts thereof - (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or ; 2(l) - `worker means a person [employed, directly or by or through any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to alter the position in any way. As regards the R. D. Employees, it is not disputed that their services were taken for Indianisation of the original designs and modifications were made, based upon the customer s requirement. Furthermore, all types of tests of various cooling towers for their suitability and design improvement were also being done here. As such, their connection with the manufacturing process, though in the shape of development of modification of the designs is established and we are of the view that they come under the definition of `worker as per Section 2(l) of the Factories Act. The fact that the said R. D. Laboratory is located in the same premises where the appellant s Unit is has also weighed with us for arriving at the said conclusion. In this connection, Tribunal s decision in the case of M/s. Industrial Instruments Control v. Collector of Central Excise reported in 1992 (62) E.L.T. 163 (Tribunal), is relevant wherein it was held that an Engineer though employed at the Head Office of the Company was to be considered as a worker as he was instructing and supervising the day-to-day manufacturing activity of the Company. The decision and judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Central Excise duty. It is also noticed that the appellant company is Central Excise Licencee for the rest of its Units and as such expected to be well aware of the Central Excise procedures. No efforts having been made by the appellant to ascertain the correct position as regards the dutiability of their product, we hold that the extended period was rightly invoked by the Department. 12. As regards the confiscation of the seized five F.R.P. Cooling Towers with an option to the appellant to redeem the same with a redemption fine of Rs. 48,500.00 which has been appropriated out of the Cash Security, we find that the goods had already been released to the appellant provisionally against a Bond. The Collector was not justified in confiscating the goods and giving an option for redemption and then appropriating the redemption fine out of the Security Amount without first calling for the production of the goods. Reference is made to Para 24 of the Tribunal s decision in the case of M/s. Grauer Well (I) Ltd. v. Collector of Central Excise, Baroda reported in 1986 (25) E.L.T. 338 (Tribunal), which is reproduced below : 24. The last point remaining to be considered is Shri Nara ..... X X X X Extracts X X X X X X X X Extracts X X X X
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