Ltd., located at Vapi, in the district of Valsad, Gujarat.
of Chromic Acid flakes lying in the Chromic Acid Section for making further enquiry into the matter.
On 30 1 1983 a team of Central Excise Preventive Officers of Buisar Division paid a surprise visit to the factory premises of M s Growel Chromates, a division of M s Grauer and Weil India Ltd., Bombay, the appellants herein, situated in Plot No.
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 .
Sodium Bichromate 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 Weil India Ltd., Vapi.
of Chromic Acid flakes valued at Rs 44,95,475 illicitly manufactured and cleared by them during the period from September 1981 to January 1983.
14 AA of the First Schedule to the Act under a valid licence, 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.
46/81 dated 1 3 1981.
46/81 dated 1 3 1981, which reads thus In exercise of the powers companyferred by sub rule 1 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.
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 beforeus, is that Chromic Acid Section of their premises companystitutes 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.
This numberification shall companye into forte with effect from 1st day of April, 1981.
of Chromic Acid flakes falling under Tariff Item 68, valued at Rs 44,95,475 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 1 of Section 11 A of the Central Excises and Salt Act, 1944, read with Rule 9 2 of the Central Excise Rules, 1944.
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 1,89,000 in lieu of companyfiscation within one month of receipt of this order by them.
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 numberification but they asserted that the said section did companystitute a factory and, therefore, the appellants were liable to pay duty under the numberification.
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.
Ltd., including Chromic Acid Section formed the division of Grauer Weil India Ltd., Bombay, in the name of M s Growel Chromates, on merger.
The plan so acquired is designed for annual capacity to manufacture the following products Sodium Bichromate 2190 Tons Yellow Sodium Sulphate 1314 Tons.
The officers detained 98 drums companytaining 4900 kgs.
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.
Hence this appeal.
On the other hand, while applying for L4 licences for manufacture of Sodium Potassium Dichromate falling under T.I. 14 AAon 2 12 1981 and for Yellow Sodium Sulphate falling under T.I. 68 on 18 1 1982, in the ground plans produced therewith, the assessee has safely avoided to show their premises demarcated as Chromic Acid Section, though the same premises is situated in the same plot bearing No.
and valued at Rs 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.
companytained in 126 drums valued at Rs 1,89,000 seized from their possession from Chromic Acid Section and subsequently released provisionally on execution of B11 bond are liable to companyfiscation.
Aggrieved by the above order the appellants filed an appeal before the Tribunal.
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.
On redemption, the companyfiscation goods shall be properly accounted for by them and cleared in accordance with law, if number already done.
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 has also number been disputed by the assessee, that their Chromic Acid Section is situated in the same Plot No.
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.
The Tribunal also upheld the order of imposition of penalty but reduced it to Rs 1,00,000.
On a subsequent visit on 2 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.
That necessarily means, the appellants have companytended, that they were exempted from payment of excise duty under the above quoted numberification.
85/79 Central Excises, dated 1st March, 1979, the Central Government hereby exempts all goods, falling under Item No.
Explanation.
The goods were provisionally released to the appellants on their executing requisite bonds.
They found that the appellants, who are engaged in the manufacture of Sodium Bichromate falling under Item No.
407, G.I.D.C., Vapi.
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 judgment of the Court was delivered by K. MUKHERJEE, J. This appeal under Section 35 L of the Central Excises and Salt Act, 1944 Act for short is directed against the order dated 7 6 1985 passed by the Customs, Excise and Gold Control Appellate Tribunal Tribunal for short in Appeal No.
46 dated 1.3.1981 as amended, as number governed by Section 2 m of the Factories Act, 1948.
ED SB A 104/84.C. Facts leading to and relevant for disposal of the appeal are as under.
