1986 (2) TMI 213 - AT - Central Excise

Summary

Issues:
1. Whether the workers engaged by independent contractors in a factory should be considered as employees of the factory for the purpose of Central Excise duty exemption.
2. Interpretation of the term "worker" in the context of Central Excise laws and Factory Act.
3. Whether the workers engaged by contractors in the factory should be counted towards the total number of workers for determining the eligibility for the exemption under notification No. 54/75-CE.

Analysis:
1. The appeal was filed against an order imposing a penalty and directing payment of Central Excise duty on goods cleared without payment. The dispute revolved around whether workers engaged by independent contractors in the factory should be considered employees of the factory for exemption purposes.

2. The definition of "worker" was crucial in this case, as it was not explicitly defined in Central Excise laws. The argument was made that workers engaged by contractors were not under the control or supervision of the factory and hence should not be counted as factory workers.

3. Referring to a Supreme Court case, it was highlighted that a worker is defined as someone under direct control and supervision of the employer. The argument was made that the workers engaged by contractors were not under the factory's control and were working independently, similar to the situation in the referenced case.

4. The Tribunal disagreed with the argument that the Factory Act's definition of "worker" should be applied to Central Excise laws. It was emphasized that the Factory Act and Central Excise Act dealt with different subjects, and the interpretation of the term should align with the context of the specific law.

5. The Tribunal rejected the appeal, emphasizing that the workers engaged by contractors directly contributed to the factory's production process and should be considered as part of the factory's workforce. The failure to disclose these workers for duty payment purposes was deemed a deliberate evasion of duty.

6. The Tribunal dismissed the argument that controlling workers in different types of factories varied in difficulty, stating that the presence of additional workers should be accounted for irrespective of the nature of work.

7. In conclusion, the appeal was rejected, affirming that workers engaged by independent contractors in the factory should be considered part of the factory's workforce for determining eligibility for Central Excise duty exemptions.