B.M. AUTO INDIA Vs. CCE

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s. B.M. Auto India, is whether they were employing more than 10 workers during the period prior to 30.44.85 (sic) and as such were covered by the definition of factory under the Factories Act, 1948 and whether benefit of Notification No. 77/83 is available to the goods manufactured by them.

(2.) SHRI Sarabjit Singh, learned partner of the Appellants, submitted that the Appellants manufacture leaf springs and left spring assembly falling under Tariff Item 68 of the old Central Excise Tariff; that their small scale unit was not a factory under Section 2(m) of the Factories Act, 1948; that accordingly all the goods falling under Item 68 were fully exempted from payment of duty under Notification No. 46/81 -C.E., dated 1.3.1981; that they were showing more number of workers in the offer form or tender form to different organisations simply to attract business which was customary in business circles; that once the tender was accepted, it was not difficult for them to supply the goods from their own factory as well as from the goods purchased from other manufacturers; that employees connected with office duties and having nothing to do with manufacturing process cannot be included; that they had only applied for registration in 1981 whereas the demand pertains to the year 1983 -84 and 1984 -85; that further the declaration is valid only for one year for which it is applied; that the fact remains that no registration under the Factories Act, 1948 was ever done since they never had more than 9 workers; that Survey Report of ESI Authorities is also no proof; that two more units were situated adjacent to their unit in the same complex and ESI authorities must have counted the workers of other two units. He, further, submitted that they were supplying substantial quantities of goods to O.E. manufacturers and such supplies were exempted from payment of duty under Notification No. 167/79 -CE; that the Department had not established beyond reasonable doubt that the goods purported to have been supplied by them to O.E. manufacturers and others were in fact manufactured by them in their factory by producing vouchers of raw materials etc.; that no seizure of any goods had been made by the Department; that the possibility of procuring the goods as bought out items cannot be ruled out; that they had also not utilised their quota of L.D.O. completely; that they were engaged in trading activity from their Delhi office.

(3.) WE have considered the submissions of both the sides. Notification No. 46/81 provides exemption to all goods falling under Item No. 68 other than goods manufactured in a factory. According to Section 2(m) of the Factories Act, 1948 "factory means any premises including precincts thereof wherein 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.... The Adjudicating Authorities has given