1992 (9) TMI 207 - AT - Central Excise

Summary

Issues:
- Eligibility of the respondents for exemption under Notification No. 43/82-C.E., dated 28-2-1982.
- Determination of whether the factory leased out to the respondents is the same as the one in which goods were manufactured previously.
- Interpretation of Clause 2(ii) of Notification 43/82 regarding the aggregate value of clearances from the factory.

Eligibility for Exemption under Notification:
The appeal concerns the Collector of Central Excise, Madurai challenging the order of the Collector of Central Excise (Appeals), Madras regarding the duty on Synthetic Organic Dye-stuffs cleared by the respondents. The issue revolves around the respondents' eligibility for exemption under Notification No. 43/82-C.E., dated 28-2-1982. The dispute arises from the leasing of a factory by M/s. Allvee Dye Chemicals to the present respondents, affecting the determination of exemption eligibility.

Factory Lease and Previous Manufacturing Activities:
The facts reveal that M/s. Allvee Dye Chemicals leased part of their factory to the present respondents, who started manufacturing the same goods. The Assistant Collector denied exemption, considering the manufacturing activities of M/s. Allvee Dye Chemicals in the leased portion. However, the Collector (Appeals) differentiated between the two factories based on registration as small-scale industries by the Director of Industries. The Collector's appeal questions this distinction and the applicability of Clause 2(ii) of the notification regarding clearances exceeding a prescribed limit from 'any factory.'

Interpretation of Notification Clause 2(ii):
In the analysis, the Tribunal emphasized the need to establish conclusively that the factory leased to the respondents was the same where M/s. Allvee Dye Chemicals previously operated. The absence of specific evidence, such as the lease agreement or the approved ground plan of the original factory, hindered the determination. Without concrete proof linking the two factories, the Tribunal rejected the appeal, highlighting the inability to apply Clause 2(ii) of Notification 43/82-C.E. to deny exemption to the respondents for the current and succeeding years.

This judgment underscores the importance of establishing a clear connection between the leased factory and the previous manufacturing activities to determine eligibility for exemption under the relevant notification. The decision emphasizes the necessity of concrete evidence, such as lease agreements or ground plans, to substantiate claims regarding factory operations and exemption eligibility.