ORDER
K.S. Venkataramani, Member (T)
1. The appellants have a factory at Plot No. 14 in Sector 1 of Parwanoo, Himachal Pradesh. It is a factory registered under the Factories Act, 1948 and also licensed under Central Excise for manufacture of filters of various types. They also hired another industrial shed at Plot No. 19F in Sector-2, Parwanoo and manufactured filters falling under Item 68 Central Excise Tariff by employing less then 10 workers. They approached the Central Excise Authority for exemption for the goods manufactured at the premises No. 19F Sector-2, under Notification No. 46/81. This notification exempts from Central Excise duty goods manufactured in other than a factory as defined under Section 2(m) of Factories Act, 1948. The Assistant Collector of Central Excise, Chandigarh by his communication dated 24-3-1984, held that the appellants unit at Sector 1, Parwanoo is registered under the [Factories] Act, 1948 and that the new unit at Sector 2 is within the appellants fold and that the new unit is simply an extension of the main factory of the appellants. The Assistant Collector, therefore, rejected their claim for exemption under Notification 46/81. The appeal against this decision of the Assistant Collector was rejected by the Collector of Central Excise (Appeals), New Delhi by the impugned order holding that the unit at Sector 2, Parwanoo had no separate legal existence but was part and parcel of the factory at Sector 1.
2. Sh. G. Shiva Das, ld. Counsel for the appellants, contended that the exemption under the Notification 46/81 is granted to the goods qua the place of manufacture and not qua the person manufacturing the goods in such place. The ld. Counsel in support of his argument relied upon the following decisions of the Tribunal:
– Order No. 649/84-D, dated 16-11-1984 – Saw Mill Cum Timber Seasoning Plant v. C.C.E., Hyderabad;
– Order No. 204/1989-B1, dated 7-12-1989 – C.C.E., Calcutta v. Standard Manufacturing Corporation; and
– Order No. 32/93-B1, dated 12-2-1993 – C.C.E., Chandigarh v. Panesar Engg. Works, Panesar Bros., Sachdeva & Sons.
3. Ld. D.R., Sh. Somesh Arora, submitted that the communication of the Assistant Collector has not brought out the detailed factual background although the Collector (Appeals) order gives factual findings. Ld. D.R. contended that the exemption under the Notification 46/81 cannot be extended in a case like this where the unit concerned has no separate existence but is totally dependent on the main unit. This criterion adopted by the lower authorities finds support, says the ld. D.R. in the Tribunal decision reported in 1987 (32) E.L.T. 790. In the case of Cothas K. Prakash v. Collector of Central Excise.
4. The submissions made by both the sides have been carefully considered. Notification 46/81 exempts goods falling under Item 68 Central Excise Tariff and manufactured in premises other than a factory as defined in clause 2(m) of Factories Act, 1948 from Central Excise duty. The ground on which the Department has denied the exemption to the goods i.e. filters is that the other premises is only part and parcel of the first premises which is licensed under Central Excise and has no independent existence. However it is found that in similar circumstances relating to the same notification, the Tribunal in the case of C.C.E., Chandigarh v. Panesar Engg. Works, Panesar Bros. & Sachdeva & Sons, in its Final Order E/32/93-B1, dated 12-2-1993, has held, “Benefit of notifications, as urged, 85/79 and 46/81 is available to any premises which is employing less than 10 workers. Therefore, this benefit has been correctly accorded by the adjudicating authority and this cannot be challenged on the ground that the two units are one and the same.” In that case, the Department had denied the benefit of the Notification 46/81 alleging that Panesar Engg. Works and Panesar Bros, are owned by closely knit family, having common accountant, and that Panesar Bros, did not have sufficient machinery for manufacturing the rice sheller plants and did not have sufficient space as well. Similarly, in another decision of the Tribunal Final Order No. 204/89-B1, dated 7-12-1989 in the case of C.C.E. v. Standard Manufacturing Corporation, the Tribunal held, “The Collector (Appeals) has correctly observed that the exemption under Notification 46/81-C.E. is with reference to the place of manufacture and not with reference to the fact as to who is the manufacturer.” In that case the Department denied the exemption to the goods (parts of diesel locomotives) got manufactured by the appellants, therein through job workers out of their raw-materials at premises employing less than ten workers and hence not falling within the definition of factory under Section 2(m) of Factories Act, 1948. Further, the criterion for exemption under the notification has been clearly brought out in the Order No. 649/84-D, dated 16-11-1984 of the Tribunal in the case of Sato Mill Cum Timber Seasoning Plant v. C.C.E. The Tribunal observed, “The Additional Collector should have examined whether at the relevant time, the Saw Mill cum Timber Seasoning Plant (without clubbing the number of workers employed in any other factory of the manufacturer) came within the definition of “factory” under Section 2(m) of the Factories Act, 1948. If he found that it did not come within that definition, he should have held that the appellants were entitled to the benefit of Notification 85/79 and Notification 46/81 as amended by Notification 92/81, and would be entitled to full relief.” The Cothas Prakash case (supra) relied upon by the. D.R. does not advance the Department’s case because what the Tribunal held therein was that if the work carried out at two different places is so inter-connected that the work of manufacture would not be complete without the activity at both places, the two places together would constitute one factory for the purpose of that manufacturing activity. In the present case, it is not as if the two units are carrying out such interdependent manufacturing activity. Having regard, on the other hand, to the consistent view of the Tribunal regarding the interpretation of the notification in 1984, 1989 and latest in 1993, it has to be held that in the present case also, following the ratio of the aforesaid decisions, the goods manufactured in the premises at Plot No. 19F in Sector 2 of Parwanoo employing less than ten workers are eligible for exemption under Notification 46/81 and exemption cannot be denied on the ground taken by the lower authorities in this case. The appeal is, therefore, allowed.