1. The short point arising for consideration in this matter is the availability of benefit of Notification No 54/75-CE dated 1.3.1975 read with Notification No. 105/76-CE dated 16.3.1976 whereby certain factories were taken out from the purview of excise duty under Tariff Entry 68 provided the strength of "workers" employed in the said factory did not exceed 50.
2. The appellant a Company, named Asiatic Oxygen Ltd., Padi, Madras is a manufacturer of industrial gases namely, Industrial Compressed Oxygen, Medical Oxygen and Dissolved Acetylene, and is holding Central Excise licence for the purpose. The product known as Acetylene was brought under excise tariff with effect from 28.2,1976 with reference to Tariff Item 68, but by virtue of the aforesaid Notifications, those factories where the number of workers employed did not exceed 49, were exempted from excise duty under Tariff Item 68. It appears that the appellant sent a letter to the Area Superintendent of the Central Excise on 17.8.1976 in reply to their notification giving a list of workers employed by them in terms of Government Notification referred to above read with subsequent clarification as contained in Government of India's letter No. 8.35/2/75 TRU dated 15.5.1975.
3. The list was examined and analysed by the concerned Superintendent and he came to the view, by his order dated 3.10.1977, that the party had not disclosed particulars of all the workers employed in the factory. He further held that apart from the list of 41 which they had submitted, there were certain other categories which clearly fell within the definition of workers as contemplated in the definition given under the Factories Act, 1944, which definition in his view had to be adopted for this purpose in the absence of any specified definition in the CET. Working on this basis, he held it to be a clear case where the Company had omitted to mention the number of workers, which were also to be taken into account. He determined the number of such other workers to be 22 more in addition to the 41 given by the Company, the break-up being as under; He thus categorically held that the number of workers exceeded 49 and the Company was not entitled to exemption from payment of excise duty for the product falling under Tariff Item 68 of the CET during the period 1.3.1975 to 17.6.1977.
4. The party went in appeal before the Appellate Collector.reiterating the same contentions and relying on the letter of the Government of India dated 15.5.1975 and pleaded that the Superintendent had erred in considering the clerical staff as well as persons in the Sales Section to be also falling within the definition of workers and that the list furnished by them ought to have been acceptec. They even contested the view that the persons employed in the Cylinder Record Section would be deemed to be workers of the factory.
5. However, the Appellate Collector vide his Order dated 10.5.1978 considered the contentions raised before him but having regard to the definition of the term "workers" as defined in Section 2(1) of the Factories Act, 1948, he confirmed the view of the Superintendent and his findings to the effect that persons working in the Cylinder Record Section will certainly fall within the category of "workers" as the cylinders are required for Dis-solved Acetylene for marketing the Dissolved Acetylene produced in the factory of the appellant. He also observed that similarly the persons working in the Sales Section would be deemed to be the "workers" of the factory as the Sales Staff was required to plan production and to dispose of the excisable product in question and they certainly perform duty incidental to the manufacturing process, and that all these persons had been rightly classified as "workers". He also held the view that even the workers connected with the other manufacturing activities of the factory, namely, production of industrial oxygen or those in the LPG department connected with the distribution of LPG to industrial users are also to be taken into consideration to determine the number of workers for the purpose of the excisable product, namely. Dissolved Acetylene falling under Tariff Item 68. He disposed of the plea of the appellant that in Bangalore and Durgapur, the Assistant Collectors have exempted their sister concerns from payment of duty on similar excisable product under Tariff Item 68 by accepting their contentions as to the number of workers by observing that, unless full particulars were available, those findings could not be taken into account and no comments could be made in that regard. He accordingly upheld the finding of the Superintendent and dismissed the appeal.
6. The party went in revision to the Government against this decision of the Appellate Collector, again pleading that the orders of the original and Appellate authorities were based on the ground that the number of workers employed in the factory had to be taken into consideration and not merely the number of workers employed in a particular manufacturing activity carried out in a portion of the factory, and that this view was erroneous and that they had certainly erred in holding the persons employed in the Sales Section also as "workers". According to the Appellant, the Sales Staff could not be considered to be doing any work incidental to or connected with the manufacturing process. They based their pleas on the judgment of the Madras High Court holding that persons employed merely for selling manufactured articles do not come within the definition of 'employee', even though they happen to occupy a room at the factory for the sake of convenience, and similarly persons working as drivers, conductors and checkers are not workers and that the expressions "incidental to" or "connected with" should be construed so as to imply proximate and not remote relationship between the work of the employees in question and a manufacturing process. They thus reiterated that if the Sales Staff, drivers etc. were to be excluded, the number of workers would not exceed 49 and thus the petitioner would be eligible to the benefit of exemption Notification and as a consequence, exempt from payment of duty on the Dissolved Acetylene and Lime Sludge under the then existing notifications. They, however, conceded that the number of workers actually employed in issuing empty cylinders from the stores to the factory or filled cylinders to customers outside, may be considered as "workers", but reiterated that the Sales staff, lorry drivers, gardeners and Bill clerk could not be so considered.
7. It is this revision petition filed before the Central Government which has been received by transfer under the provisions of Section 35P of the Central Excises & Salt Act, 1944, to be treated and disposed of as an appeal before the Tribunal and is being taken up as such.
8. Today, at the time of hearing, Shri K. Saravanai, Advocate, appeared for the appellant whereas the Revenue was represented by Shri K.D.Tayal, Senior Departmental Representative. Shri Saravanai stated that the term "worker" not having been defined in the CET, the clarification issued by the Government of India by means of letter dated 155.1975 had to be taken into account and that, keeping that in view, the finding of the original authority as confirmed by the appellate authority by means of the Order-in-Appeal, was certainly erroneous. He particularly pointed out that a gardener in any case could not be treated as a worker of the factory and so would be the case in regard to mechanics working in the LPG Unit and that lower authorities had definitely erred in treating the clerical staff and the sales staff to be workers. He, however, conceded that the persons working in the Cylinder Record Section could be treated as workers and he also did not dispute the number of workers in the Cylinder Record Section as 9. He placed reliance on the list submitted subsequently, pertaining to the period 1.3.1975 to 17.6.1977, which admittedly is the relevant period However, it was observed during hearing that there were discrepancies in the Lists furnished by the appellant from time to time, all relating to the same period.
9. Shri K.D. Tayal intervened to point cut that the list which was before the Superintendent, as given by the appellant for the relevant period, was with him in original on the file of the Department received by him, and that the said list had been given by them as per definition, and in accordance with the Finance Ministry's letter No.8.35/2/75-TRU dated 15.5.75, relied upon by the party, and this list was in marked variance with the list now filed in the paper book, inasmuch as no gardener was shown in that list nor any LPG mechanic. He contended that even though appellant's own case was to be taken, then this list which the appellant gave in terms of Government of India's clarification, which view they are accepting, the number given is 41.
Adding to it the number 9 of Cylinder Record Section, which the appellant does not now dispute to be falling under category of "workers", the number would come to 59 which is definitely in excess of 49, contemplated by the notification relied upon by the appellant.
10. We have looked up the said list, and we find that there is no escape for the appellant because this list is in original which the appellant themselves filed, and determines the "workers" as per definition given by the Government of India on which they are placing reliance and it was this list of 41 which was before the Superintendent, when he passed the impugned order. This list does not have any reference to any gardener or LPG mechanic, which the learned Counsel now wanted to be excluded. We, therefore, take this list to be the correct list, and by adding thereto the number of 9 employees of Cylinder Record Section, which the appellant does not now question in this appeal, the total number of workers comes to be 50. We, therefore, do not find it necessary to go into the question, as to whether the workers employed in the Sales Section or Transport Section would be covered by the definition of "workers" of the manufacturing unit or not because that does not arise for determination, as on admitted facts, number of "workers" comes to be 50. We also do not find it possible to consider the plea of the learned Counsel that it being a border line case, benefit should be given to the assessee because when we are considering the plain wording of the statutory notification that has to be strictly construed and if the party falls outside the ambit of the said notification, there cannot be any escape from the situation.
11. We are, therefore, constrained to hold that in this case the appellant has failed to prove that for the period under consideration, namely, 1.3.1975 to 17.6.1977, they were entitled to the benefit of exemption notification on the basis of the number of workers employed by them. The appeal is accordingly dismissed.