ORDER
G.A. Brahma Deva, Member (J)
1. The point to be considered in this case is whether the party is entitled for incentive rebate in terms of Notification 150/83, dated 13-5-1983 during the 1983-84 incentive period. The appellants manufactured refractory bricks falling under T.I. 68 i.e. at Serial No. 23 of the table of Notification 150/83, dated 13-5-1983. The appellants have claimed the benefit of exemption in terms of Notification 77/83. The exemption is available to units who fulfilled the conditions contained in clauses 2,3 and 4 of the said Notification. Condition No. 2 of the Notification stipulates that for eligibility of this exemption, the aggregate value of clearance of excisable goods from factory in the previous financial year should not exceed Rs. 40 lacs. According to Department total clearance during 1983-84 exceeded Rs. 40 lacs and the factory was not eligible for the benefit contained in the Notification for the year 1984-85. It was claimed by the party that they are entitled to rebate in terms of Notification No. 150/83, dated 13-5-1983 during the period 1983-84 incentive period and in that event, the excess clearance should not be taken into consideration as per stipulation of Notification 77/83. The Assistant Collector who adjudicated the proceedings observed that the factory had cleared the goods of value amounting to Rs. 37,69,375.00 during the base period i.e. 1-3-1982 to 28-5-1983. The factory was closed for 48 days between 12-4-1982 to 29-5-1982. As per the provisions of Government of India Notification 150/83 the value of base clearances would be :
3769375 365 = Rs. 4340132.00
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3365-48
and 120% of that = Rs. 5208152.00
Accordingly he held that the appellants were not entitled to incentive because the base period clearance value works out to Rs. 52,08,152.00 and the clearance value of incentive period is at Rs. 45,38,908.00 and they were not eligible for incentive under Notification 150/83 and consequently they were not entitled to avail provision of Notification 77/83 for the year 1984-85. The appellants have become unsuccessful before the Collector (Appeals) and hence this appeal.
2. Shri M.A. Rangaswamy, learned Advocate appearing for the appellants submitted that the point of dispute is regarding meaning of word ‘closed’ as mentioned in the Notification 150/83. The word ‘closed’ has not been defined either in the Act or in the Notification No. 150/83. The workers resorted to a ‘stay in strike’ from 12-4-1982 to 29-5-1982 but the entire activity was neither stopped nor factory was closed since other activities were carried out during the stay period. Mere workers’ strike cannot be considered that factory was closed and this strike period cannot be taken for granted that factory had remained closed for a period of more than 15 days for the purpose of rebate in terms of Notification. He drew our attention to the finding given by the Collector (Appeals) wherein it was held that the word ‘closed’ should be interpreted with reference to production-day and if on a particular day there is no production then for the purpose of Notification, the factory is closed. He contended that the Collector (Appeals) erred in not observing that the Notification 150/83-C.E. refers to only clearance and not production and there is no basis for his assertion that the word ‘closed’ should be interpreted with reference to production-day. He said that while interpreting the identical Notification 283/82 for earlier period the Tribunal has clearly held in the case of Collector of Central Excise, Madras v. Indian Organic Chemicals Ltd., Madras reported in 1985 (22) E.L.T. 945 that Notification 283/82-C.E. related to the concession being given when clearance during the incentive year exceeded the clearance of the base year and right through Notification deals with clearance and not with production as such. This issue was followed by the Collector (Appeals) in the case of Avery (I) Limited, Ballabhgarh reported in 1988 (38) E.L.T. 216 wherein the Collector held that factory not to be treated as closed if day to day activities were not stopped even if production or clearance of specified goods had remained closed with reference to explanation 1(b) under Notification 150/83-C.E., dated 13-5-1983. Hence clearance or production not to be taken on day to day basis while considering rebate with reference to Notification 150/83 and possibly monthly clearance and in the instant case the clearance has taken place in every month and even in the month of April as well as May prior to and after strike period.
3. Shri P.K. Jain, learned SDR while countering the arguments submitted that it is clear from explanation 1(b) under Notification 150/83 that if the factory had remained closed for a period of more than 15 days due to any reason and in that case clearance has to be computed as per calculation or formula as given in clause (a) and accordingly it has been worked out since factory had remained closed due to strike for a period [of] 48 days. There was no reference [to] either day to day production or monthly but it has to be worked out as laid down in Notification taking into consideration of the fact that factory had remained closed for a period of more than 15 days at a time. Referring to the notice issued by the management to all employees he said that it is clear that employees/workers have stopped the work and in the common parlance stoppage of work due to strike amounts to closure since the term ‘closed’ has not been defined in the Notification. Since the workers have stopped the work in view of the clear finding given by the Assistant Collector that there was neither production nor clearance during the stay period it amounts to closure and referring to the decision of the Supreme Court in the case of Collector of Central Excise, Hyderabad v. Fenoplast (P) Ltd. 1994 (72) E.L.T. 513 (SC) he said that common parlance/trade understanding is decisive factor and applies when words are not defined either in the Act or in the Notification. He said that the decision referred to by the other side in the case of Indian Organic Chemicals is not applicable to the facts of this case since the issue was in that case whether rebate should be on production or not and issue with reference to closure was admitted therein.
4. We have carefully considered the submissions. Whether factory was closed or not was not an issue in the case of Indian Organic Chemicals (supra) as pointed out by the Departmental Representative. Since admittedly factory was closed for a period of 67 days due to a lock-out as can be seen from the facts of the case. Even then it was held that Notification 283/82-C.E. deals with clearances and not production and negatived the contention of the Department that the Notification provides an incentive to higher production and that during the period of 67 days the factory remained ‘closed’ and upheld the contention of the party that what was to be compared was the quantity cleared during the base period with the quantity cleared during the incentive period.
But in the present case the main point of dispute is whether factory had remained closed during the period of strike. Undoubtedly the Notification No. 150/83-C.E. related to the concession being given when clearances during the incentive years exceeded the clearances of the base year. Like earlier Notification 283/82, dated 27-11-1982 it deals with clearances and not with production as such. In explanations (1) and (2) of the Notification 150/83, we come across terms ‘base clearances’, basic period and formula has been laid down in clause (1)(a), 2(1)(b) to the explanation how it is to be computed if the factory had not remained closed for a period of more than 15 days and how it is to be done it had remained closed for a period more than 15 days at one time. The relevant explanation of the Notification 150/83, dated 13-5-1983 is as under :-“Explanation. – For the purpose of this notification :-
(1) “base clearances” :-
(a) in the case of a factory which had not remained closed for a period of more than 15 days at one time during the base period due [to] any reason –
(i) in respect of goods specified in column (3) of the said Table A, means 110% of the clearances of such goods from such factory during the base period; and,
(ii) in respect of goods specified in column (3) of the said Table B, means 120% of the clearances of such goods from such factory during the base period;
(b) in the case of a factory which had remained closed for a period of more than 15 days at one time during the base period due to any reason, means the clearances as determined under sub-clause (i) or, as the case may be, sub-clause (ii) of clause (a) above multiplied by the factor 365/365-X, where X denoted the total number of days comprised in the period or, as the case may be, periods during which the factory was so closed.
(2) “base period” shall be the year in which the aggregate of the clearances of specified goods during the period, commencing on and from the 1st day of March, 1981 and ending with the 28th day of February, 1982 or the period commencing on and from the 1st day of March, 1982 and ending with the 28th day of February, 1983, whichever was higher.
(3) … ”
5. Although there was mention of word ‘closed’ and explained how it is to be calculated if factory was closed for 15 days or more, the word ‘closed’ has not been defined either in the Central Excise Act or in the Notification as it was argued on behalf of the appellants. Sufficient evidence was brought on record to show that the employees have struck work and resorted to a stay in strike from 12-4-1982 to 27-5-1982. But there is no evidence to show that factory was actually closed during the period of strike. Strike may result in closure of the factory but not necessarily. Strike and closure are not synonymous. Since beginning it was the contention of the appellants that factory had not remained closed during the strike period since other activities were carried out in the said period and this was not rebutted by the Department. In the absence of definition of word ‘closed’ in the Notification it has to be understood in its natural grammatical meaning and accordingly it cannot be said that factory was closed during the period [of] strike. Explanation 1(b) under Notification 150/83 specifies about the closure of factory and nothing to suggest that 1(b) is applicable if there was no production or clearance and therefore, just because there was no production of the goods in question for the propose of explanation 1(b) of the Notification, the factory could not be treated as closed when in fact day to day activities of the factory were not stopped. Accordingly we set aside the impugned order and appeal is allowed with consequential relief.