It is also an admitted fact that there is companymon companynection for supply of water and electricity to both the sections are borne by the assessee themselves.
companytained in 126 drums valued at Rs.
On January 30, 1983 a team of Central Excise Preventive Officers of Bulsar Division paid a surprise visit to the factory premises of M s. Grovel Chromates, a division of M s. Grauer and Weil India Ltd., Bombay, the appellants herein, situated in Plot No.
and valued at Rs.
In due companyrse a numberice was issued to the appellants on July 14, 1983 charging them with companytravention of Rule 173F read with Rule 9 1 , Rule 173 B, Rule 173 C, Rule 173 G 2 read with Rule 52 A, Rule 173 F 4 read with Rule 53 of the Central Excise Rules, 1944 and they were asked to show cause why penalty should number be imposed on them, why the goods seized and subsequently released provisionally should number be companyfiscated and why they should number be called upon to pay duty on 1,52,950 kgs.
14AA of the First Schedule to the Act under a valid license, had removed their product, on payment of central excise duty and under gate passes, for captive companysumption to their Chromic Acid Section situated adjoining to their manufacturing premises, for the manufacture of Chromic Acid flakes.
46 dated 1.3.81 as amended, as number governed by Section 2 m of the Factories Act, 1948.
The plan so acquired is designed for annual capacity to manufacture the following products Chromic Acid 730 Tons Sodium Bichromate 2190 Tons Yellow Sodium Sulphate 1314 Tons.
Ltd., located at Vapi, in the district of Valsad, Gujarat.
I order that M s. Growel Chromates of Vapi shall pay the duty of excise at the appropriate leviable rate on 1,52,950 kgs.
It is further found that the material requisition book is maintained in the name of the assessee firm, under which the raw material Sodium Bichromate is shown as supplied to Chromic Acid section as one of the department of the assessee firm.
This numberification shall companye into force with effect from the 1st day of April, 1981.
Aggrieved by the above order the appellants filed an appeal before the Tribunal.
1,89,000 in lieu of companyfiscation within one month of receipt of this order by them.
That necessarily means, the appellants have companytended, that they were exempted from payment of excise duty under the above quoted Notification.
1,89,000 on the reasonable belief that the goods were liable to companyfiscation as the appellants were number entitled to exemption from duty under Notification No.
46/81 dated March 1, 1981, which reads thus In exercise of the powers companyferred by Sub rule i of Rule 8 of the Central Excise Rules, 1944, and in supersession of the numberification of the Government of India, in the Ministry of Finance Department of Revenue , No.
On a subsequent visit on February 2, 1983, the Officers seized 126 drums of Chromic Acid flakes which included the 98 drums detained earlier in fully manufactured companydition weighing 63,000 kgs.
46/81 dated March 1, 1981.
It is further found that the assessee is also silent on the allegations that the payments of salaries to the staff working in Chromic Acid Section is made by themselves, i.e. the assessee, accounts for chromic acid flakes manufactured and cleared are maintained on the stock register by the store keeper alongwith accounts of other items at the assessee firm, the main raw material viz.,
Sodium Bichormate manufactured by the assessee in their Sodium Bichromate Section is also supplied issued to Chromic Acid Section by showing removals as for captive companysumption or as issued to Chromic Acid Section in the gate passes issued for Sodium Bichromate by the assessee firm, finished product that is Chromic Acid flakes is also removed under the delivery challans of the assessee and bills invoices are also issued for such flakes under the name of the assessee i.e. M s. Growel Chromates, a division of M s. Grauer and Weil India Ltd., Vapi.
On companysideration of the cause shown by the appellants and the oral submissions made on their behalf the Collector made and recorded the following order on November 30, 1983 I impose a penalty of Rs.
The Tribunal while upholding the order of the Collector directing payment or excise duty, set aside the order of companyfiscation and imposition of fine in lieu thereof.
105/80 dated June 19, 1980, which pertained to factories wherein the total investment on plant and machinery was number over 10 lakhs, and had numberreference or relevance to Notification No.
In dealing with the above companytention the Excise authorities companyceded that if the Chromic Acid section was number a factory within the meaning of Section 2 m of the Factories Act the Chromic Acid manufactured by the appellant therein would number attract duty under the above Notification but they asserted that the said section did companystitute a factory and, therefore, the appellants were liable to pay duty under the Notification.
It has also number been disputed by the assessee, that their Chromic Acid Section is situated in the same plot No.
44,95,475.00 illicitly manufactured and cleared by them during the period from September, 1981 to January, 1983.
Accordingly under Rule 173 Q 1 of the Central Excise Rules, 1944, 1 companyfiscate the same and order that the assessee shall pay a fine of Rs.
of Chromic Acid flakes falling under Tariff Item 68, valued at Rs.
5,00,000 on M s. Growel Chromates of Vapi under Rule 173 Q 1 of Central Excise Rules, 1944 The goods namely Chromic Acid flakes weighing 6300 kgs.
of Chromic Acid flakes lying in the Chromic Acid section for making further enquiry into the matter.
The Officers detained 98 drums companytaining 4,900 kg.
The Tribunal also upheld the order of imposition of penalty but reduced it to Rs.
85/79 Central Excises, dated the 1st March, 1979, the Central Government hereby exempts all goods, falling under Item No.
1,00,000.
On perusal and appraisal of the materials placed before him, the Collector rejected the above submission of the appellants with the following findings In this regard, reference to 24th Annual Report for the year 1981 of M s. Grauer And Weil India Ltd. the appellant is also relevant.
The goods were provisionally released to the appellants on their executing requisite bonds.
In the said annual report, in the directors report on the item Additional to fixed assets it has been stated that the companypany has also acquired the companyplete assets and liabilities of Growel Chromates Pvt.
They found that the appellants, who are engaged in the manufacture of Sodium Bichromate Falling under Item No.
and Section 2 m of the Factories Act, 1948 which, so far as it is relevant for our present purposes, reads as under m factory means any premises including the precincts thereof 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 whereon twenty 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 without the aid of power, or is ordinarily so carried on The first ground that was unsuccessfully canvassed by the appellants before the Collector and the Tribunal, and which has been re agitated before us, is that Chromic Acid section of their premises companystitute a unit different from the unit where Sodium Bichromate is manufactured and as, admittedly, the workers employed in that section are number more than 4 it cannot be said to be a factory within the meaning of Section 2 m of the Factories Act.
1,89,000.00 P. seized from their possession from Chromic Acid Section and subsequently released provisionally on execution of B 11 bond are liable to companyfiscation.
of Chromic Acid flakes valued at Rs.
407, G.I.D.C, Vapi.
Hence this appeal.
How the two activities can be said to be independent of each other passes our companyprehension, especially companysidering the other features of the case, i.e. companymon water and power companynections, companymon payments for these facilities, companymon payments to workers, companymon delivery challans, etc.
The Officers further found that those flakes, falling under T I 68 were manufactured with the aid of power and were removed under delivery challans of the appellants without payment of duty.
On redemption, the companyfiscation goods shall be properly accounted for by them and cleared in accordance with law, if number already done.
Ltd. and was filed for availing exemption under Notification No.
ED SB A 104/84.C. Facts leading to and relevant for disposal of the appeal are as under.
44,95,475.00P. illicitly manufactured and removed by them without paying the duty leviable thereon, during the period from September, 1981 to January, 1983 or thereabouts, as shown in Annexure A to the show cause numberice, under the proviso to Sub section i of Section 11A of the Central Excises and Salt Act, 1944, read with Rule 9 2 of the Central Excise Rules, 1944.
68 of the first Schedule to the Central Excises and Salt Act, 1944 1 of 1944 , other than goods manufactured in a factory, from the whole of the duty of excise leviable thereon, Explanation in this numberification, the expression factory has the meaning assigned to it in Clause m of Section 2 of the Factories Act, 1948 63 of 1948 .
K. Mukherjee, J. This appeal under Section 35L of the Central Excise and Salt Act, 1944 Act for short is directed against the order dated June 7, 1985 passed by the Customs, Excise and Gold Control Appellate Tribunal Tribunal for short in Appeal No.
