TISCO LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) NOTIFICATION No. 281/86 -C.E., dated 24 -4 -1986 granted exemption from central excise duty in respect of goods manufactured in a workshop within a factory. The scope and ambit of this notification is the subject -matter in these appeals. These appeals have come before this Larger Bench on reference from Division Benches on account of differences of opinion. We read the said notification for convenience of discussion : -

(2.) IT is clear from the notification that the exemption is in respect of goods manufactured "in a workshop within a factory" and intended for use in the said factory or in any other factory of the same manufacturer for repairs or maintenance of machinery installed therein. Brief facts in the case of the appellants may be stated in order to appreciate whether the appellants meet these requirements.

(3.) THE claim of both the appellants is on the ground that in the absence of any definition of 'workshop' in the notification, the ordinary meaning of workshop should be applied. Reliance has been placed on the definition of 'factory' in Section 2(e) of the Central Excise Act and the meaning given to the word 'workshop' in various dictionaries. It has been submitted that since there could be no restriction placed on the meaning of 'workshop' based on size etc., it has to be taken to mean co -extensive with factory. It was pointed out by the learned counsel representing TISCO that this position has been accepted by - the CEGAT in its decision in the case of Indian Iron & Steel Co.Ltd. v. C. C. E. reported in 1990 (46) E.L.T. 409 (T). It has also been submitted that the notification has exempted "all goods manufactured in a workshop". Further, the exemption is only subject to one requirement that the goods manufactured are intended for use in the said factory or in any other factory of the same manufacturer for repairs or maintenance of machinery installed therein. Therefore, such of the production in the factory as is intended for maintenance/repair remains exempt and the remaining production in the factory only is subject to duty. It has also been submitted that the proviso to the notification removes any doubt about the eligibility of the goods as it mentions that "where such use is in a factory of a manufacturer, different from his factory where the goods have been manufactured, the exemption is subject to the observance of Chapter X procedure". It was emphasised during hearing by the learned counsel representing TISCO that it is significant that the proviso refers to "where such use is in a factory...different from his factory where the goods have been manufactured". The learned counsel submits that the word used in the proviso is not where such use is in a factory different from the workshop where the goods have been manufactured. He submitted that if the intention was to limit the exemption to manufacture in a 'workshop', the proviso would not have used the word 'factory. According to the learned counsel, the proviso thus makes it clear that the manufacture of the goods claimed for exemption need not be in a separate workshop. Learned counsel also submitted that the Tribunal had always interpreted the notification as to include production within the entire factory. The learned counsel, in this context, referred to the decision of the Tribunal in the cases Indian Iron & Steel Co. Ltd. v. C. C. . reported in 1990 (46) E.L.T. 409