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Praga Industries P. Ltd. Vs. Collector of C. Ex. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1990)(46)ELT367TriDel
AppellantPraga Industries P. Ltd.
RespondentCollector of C. Ex.
Excerpt:
.....same was located in the factory where other goods were also manufactured. he further held that the word 'industrial unit' referred to the whole unit and not to a part. according to him, the expression is synonymous with factory, undertaking or unit. he held that for entitlement of exemption under notification no. 89/79 the total value of capital investment of the factory installed should be taken into account and not a part of the factory. with these findings, he upheld the orders of the asstt. collector. aggrieved, the appellants have filed the present appeal before us.3. we have heard shri s.m. anis, advocate for the appellants. after presenting some arguments first, he prayed for adjournment so that he could place all the relevant facts before the bench. however, on our indicating the.....
Judgment:
1. The question for decision in this Revision Application to the Government of India now transferred to the Tribunal to be disposed of as an appeal presented before it, relates to the appellants' claim for benefit under Exemption Notification No. 89/79, dated Ist March, 1979.

2. The Assistant Collector by his order dated 17-8-1978 rejected the appellants' claim holding that the total value of all the plant and machinery installed in the factory exceeded Rs. 10 lakhs. The Appellate Collector of Customs and Central Excise, Madras, by his order dated 8-10-1980 held that appellants' machine shop could not be considered as separate unit because the same was located in the factory where other goods were also manufactured. He further held that the word 'industrial unit' referred to the whole unit and not to a part. According to him, the expression is synonymous with factory, undertaking or unit. He held that for entitlement of exemption under Notification No. 89/79 the total value of capital investment of the factory installed should be taken into account and not a part of the factory. With these findings, he upheld the orders of the Asstt. Collector. Aggrieved, the appellants have filed the present appeal before us.

3. We have heard Shri S.M. Anis, Advocate for the appellants. After presenting some arguments first, he prayed for adjournment so that he could place all the relevant facts before the Bench. However, on our indicating the view that we were inclined to take, he did not press his request. Shri Anis relied on a decision of the Bombay High Court in the case of M/s. Devidayal Electronics and Wires Ltd. and Anr. v. Union of India and Anr. 1984 (16) E.L.T. 30 (Bom.). In this connection, while interpreting Notification No. 74/78 which employs similar phraseology the Bombay High Court held - "The notification uses the word 'factory and it uses the words 'industrial unit'. It must, therefore, be assumed that the words were intended to bear different meanings. Put differently, the words 'industrial unit' must mean something other than 'factory'.

4. The word 'unit' is defined in the Shorter Oxford English Dictionary, 3rd Edition, to mean 'one of the separate parts or members of which a complex whole or aggregate is composed'. A similar meaning is given to the word in Webster's Third New International Dictionary, viz. 'a single thing or person or group that is a constituent and isolable member of some more inclusive whole'. The word 'industrial' is defined in the Shorter Oxford Dictionary to mean 'pertaining to' or of the nature of, industry or productive labour! An industrial unit must, therefore, mean a separate or isolable part, concerned with industry of a complex.

5. "Given this meaning, the plant and building within the petitioners' factory at Thane used exclusively for the manufacture of varnishes must be held to be an industrial unit".

6. The Tribunal Order No. 590/84-B, Appeal No. 2097/83-B parties Swastik Metal v. Collector of Central Excise, New Delhi, following this Bombay High Court decision, held that for determining eligibility under Notification No. 176/76-C, dated 18-6-1977, only the investment on plant and machinery falling under item 68 should be taken into consideration treating this unit as an industrial unit and not the investment on plant and machinery of the whole factory.

7. Unfortunately, neither in the order of the Assistant Collector nor in the order of Appellate Collector, the necessary facts from which we could have given a decision about the applicability or otherwise of the Bombay High Court decision are available. Even the appellants have not placed all the necessary facts about what is claimed to be a machine shop to enable us to give a categorical finding about the entitlement of the appellants to their claim for exemption under notification. In view of all this, the matter requires a fuller and detailed examination at the lower levels.

8. The Assistant Collector of Central Excise shall again examine the matter in the light of two decisions referred to above and examine whether the appellants' claim for exemption under the notification squarely fits in Notification in the light of the two decisions aforesaid and then pass orders in accordance with the law. The impugned orders are thus set aside and the matter remanded to the Assistant Collector of Central Excise, Coimbatore, for de novo decision as pointed out above after giving an opportunity to the appellants of hearing. The appeal is allowed by remand.


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