Exemption denial for power-enabled processing units upheld; side galleries on a hot air stenter cannot be counted in capacity computation.

Processed woven fabrics were excluded from exemption because the factory had power-operated plant and equipment capable of bleaching, dyeing or printing, bringing it within the notification's denial clause; the exemption was therefore unavailable. In computing annual capacity of production for a hot air stenter, side galleries could not be included, as the Larger Bench view treated them as outside the relevant measurement. The capacity determination was consequently set aside for fresh computation, while the denial of exemption was sustained.

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Issues: (i) Whether the appellants were entitled to the benefit of the exemption notification in view of the existence of facility for bleaching, dyeing or printing with the aid of power or steam; (ii) whether the length of side galleries attached to the stenter could be included while determining the annual capacity of production.

Issue (i): Whether the appellants were entitled to the benefit of the exemption notification in view of the existence of facility for bleaching, dyeing or printing with the aid of power or steam.

Analysis: The notification denied exemption to processed woven fabrics where the factory had plant and equipment capable of carrying out bleaching, dyeing or printing with the aid of power or steam. The record showed the existence of power-operated machinery used for dyeing and other processing operations, and the appellants therefore fell within the exclusion contained in the notification. The Tribunal accepted that the factual foundation for denial of the exemption was made out.

Conclusion: The appellants were not entitled to the exemption on this ground, and this part of the Department's case was upheld.

Issue (ii): Whether the length of side galleries attached to the stenter could be included while determining the annual capacity of production.

Analysis: The Tribunal relied on the Larger Bench view that side galleries are not to be counted while working out the annual capacity of production of a hot air stenter. Since the adjudicating authority had included such length in the computation, the determination of annual capacity was legally unsustainable to that extent and required reconsideration.

Conclusion: The inclusion of gallery length was held to be incorrect, and the annual capacity determination was set aside for fresh computation.

Final Conclusion: The denial of exemption was sustained, but the capacity computation was reopened for recalculation, resulting in a partial success for the appellants and a remand to the adjudicating authority.

Ratio Decidendi: While processing units having power-enabled facilities for bleaching, dyeing or printing are excluded from the exemption, side galleries attached to a stenter are not includible in the annual capacity computation.

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