Customs, Excise and Gold Tribunal - Delhi
C.C.E. vs Punjab Dairy Development Corpn. Ltd. on 24 October, 1994
Equivalent citations: 1994ECR733(TRI.-DELHI), 1994(74)ELT849(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. The Revenue has filed the present appeal being aggrieved with the Order-in-Appeal No. 298/C.E./Ch-g/85, dated 29-4-1985, passed by the Collector of Central Excise (Appeals), New Delhi. The respondents are M/s. Punjab Dairy Development Corporation Limited.
2. The respondents were having a L-6 licence under Chapter X of the Central Excise Rules, 1944. They brought a heavy duty ammonia compressor under concessional rate of Central Excise duty vide exemption Notification No. 93/76-C.E., dated 16-3-1976. The said compressor was installed in their milk chilling centre. The Assistant Collector, Central Excise, Pathankot held that for the purpose of Central Excise duty concession, 'factory' means where the manufacturing process is carried on and the area where exciseable goods are stored and that it meant only the premises where the excisable goods are stored and the premises which have been licenced under Central Excise Rules for the manufacture and storage of such goods only. He confirmed the demand of Rs. 6648.60 against the respondent. The Collector, Central Excise (Appeals), Delhi set aside the order of the Assistant Collector of Central Excise, Pathankot, and held that even those premises where the goods which are used as inputs, are stored, could also be covered by the expression 'factory' as explained in Notification No. 93/76-C.E.
3. The mater was posted for hearing on 8-9-1994 when Shri B.K. Singh, learned SDR appeared for the Revenue-appellants. Shri Arun Satija, Advocate represented the respondent M/s. Punjab Dairy Development Corporation Limited.
4. Shri B.K. Singh, the learned SDR relied on order passed by the adjudicating authority and on the grounds of appeal filed by the Revenue. He stated that the premises where milk was stored were not a 'factory', and were away from the manufacturing premises where milk products were being produced.
5. Shri Arun Satija, the learned Advocate submitted that the definition of 'factory' under Notification No. 93/76 C.E. was wide enough to cover their storage plant in other premises. He pleaded for rejection of the appeal filed by the Revenue, and for confirmation of the order-in-appeal passed by the Collector of Central Excise (Appeals), New Delhi.
6. We have considered the matter. The respondent had a milk plant at Verka where they were engaged in the manufacture of milk products. They had their milk chilling centre at Narota, Jaimal Singh, Tehsil Pathankot at which the milk colfected from different places was stored before it was transferred to the manufacturing factory at Verka. For this storage chilling centre they had obtained the heavy duty ammonia compressor under concessional rate of Central Excise duty in terms of exemption Notification No. 93/76-C.E., dated 16-3-1976. Notification No. 93/76-C.E., dated 16-3-1976 is summarised below :-
"The Central Government has exempted parts of refrigeration and air-conditioning appliances and machinery intended to be used for the purposes specified hereinafter in this notification, and falling under sub-item (3) of Item No. 29A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), read with the notification of the Government of India in Ministry of Finance (Department of Revenue) No. 80/62-Central Excises, dated the 24th April, 1962 from so much of the duty of excise leviable on the said parts as is in excess of twenty per cent ad valorem subject to the following conditions, namely:-
(i) the Collector of Central Excise is satisfied that the aforesaid parts are required for use in the refrigeration or air conditioning appliances or machinery which is already installed or to be installed in any of the establishments specified in the Schedule hereto annexed;
(ii) the owner, or as the case may be, the chief executive of the establishment in respect of which parts of refrigerating or air conditioning appliances or machinery are required, gives a written undertaking to the Collector of Central Excise that he will satisfy the proper officer of the Central Excise -
(a) within one month of the date of clearance of the parts by the manufacturer, after payment of duty or such extended period as the Collector of Central Excise may allow, in the case of parts required for the refrigerating or air-conditioning appliances or machinery already installed in such establishment, and
(b) within one year of the date of clearance of the parts by the manufacturer after payment of duty, or such extended period as the Collector of Central Excise may allow, in the case of parts required for the refrigerating or air-conditioning appliances or machinery to be installed in such establishment.
that the parts are actually used in the refrigerating or air-conditioning appliances or machinery installed or to be installed, as the case may be, in such establishment specified in the Schedule hereto annexed, and, in default, to pay the part of the duty which is exempt under this notification; and
(iii) the procedure specified in Chapter X of the Central Excise Rules, 1944 is followed.
Schedule
1. Computer rooms.
2. Research and test laboratories.
3. Animal houses.
4. Telephone exchanges.
5. Broadcasting studios.
6. Trawlers.
7. Dams.
8. Mines and tunnels.
9. Thermal and hydel power stations.
10. Technical buildings of Military Engineering Services.
11. Any hospital run by the Central Government, a State Government, a local authority or a Public Charitable institution.
12. Any factory.
Explanation :- For the purpose of this notification, "factory" means any premises including the precincts thereof where any goods are manufactured or are stored but does not include any premises which are used for office purposes."
7. It is seen that among the various establishments specified in the Schedule annexed to that notification, are such establishments as research and test laboratories, and any 'factory'. The establishments listed therein may or may not produce any excisable goods. Some of them are in the nature of service establishments. It has been explained in the notification itself that for the purposes of that notification, 'factory' means any premises including the precincts thereof where any goods are manufactured or are stored but does not include any premises which are used for office purposes. It is thus seen that there is a specific explanation in respect of 'factory' under Notification No. 93/76-C.E., and that the coverage under that explanation is wider than the coverage of the 'factory' under Section 2(e) of the Central Excises and Salt Act, 1944, (the Act), which defines factory as under :-
"(e) 'factory' means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on;"
8. The expression under Notification No. 93/76-C.E. is 'goods' and not 'excisable goods'. The expression 'goods' is wider than the expression 'excisable goods'. It is also seen that while under Section 2(e) of the Act which defines 'factory', there is no reference to the place of storage, explanation under Notification No. 93/76-C.E., dated 16-3-1976 specifically refers to the premises/precincts where the goods are stored. Of course, storage has to be in relation with the manufacture of the goods. There is, however, no stipulation that the premises including the precincts where the goods are manufactured, and the premises including the precincts where the goods are stored, should be adjacent to each other. The storage has to be in relation to the manufacture of the goods but there is no stipulation that the storage has to be only of the manufactured goods, and not of the raw materials. In the case before us, milk was stored in the chilling centre as part of its manufacture into milk products. Accordingly, we agree with the Collector, Central Excise (Appeals) that "even those premises, where goods which are used as inputs are stored would also be covered." The Collector of Central Excise, Chandigarh while filing the appeal before the Collector of Central Excise (Appeals), New Delhi had made a point that the chilling centre was away from the factory wherein milk products were manufactured. To our mind, in the scheme of Notification No. 93/76-C.E., it will make no difference if the storage is for the purpose of manufacturing. He has, however, admitted that "refrigeration/air-conditioning is used in this centre for keeping the milk cool so that it may not get spoiled pending its transpiration to the factory." There is no allegation that milk stored in the chilling centre was disposed of as such, or was not used for the manufacture of milk products in the factory of the respondents.
9. Taking all the relevant considerations into account, we reject the appeal filed by the Revenue, and confirm the order passed by the Collector of Central Excise (Appeals), New Delhi.