1987 (12) TMI 154 - AT - Central Excise

Alcohol Unit Qualifies as Factory for Excise Exemption

The tribunal upheld the Collector (Appeals) decision that the unit manufacturing Alcohol qualified as a factory under Section 2(e) of the Central Excises ... Exemption to captive consumption Issues:1. Interpretation of Notification No. 118/75-C.E. regarding exemption of goods under TI 68 for use in the same manufacturer's factory.2. Determination of whether the unit manufacturing Alcohol qualifies as a factory under Section 2(e) of the Central Excises and Salt Act, 1944.3. Application of the previous tribunal decision to the current case.Analysis:1. The case involved the interpretation of Notification No. 118/75-C.E., exempting goods under TI 68 for use within the same manufacturer's factory. The dispute arose as molasses were dispatched from one unit to another for alcohol production without duty payment. The appellant argued that the by-product, Fusel Oil, did not make the receiving unit a factory under the notification. The respondent relied on a previous tribunal decision to support their case.2. The Collector (Appeals) determined that the unit manufacturing Alcohol qualified as a factory under Section 2(e) of the Central Excises and Salt Act, 1944. The Collector rejected the argument that the unit was not a factory due to Fusel Oil being a by-product. The definition of 'factory' encompassed premises where excisable goods or connected manufacturing processes were carried out, including by-products. As Fusel Oil was excisable and produced in the unit, it met the definition of a factory. Consequently, the unit was eligible for the exemption under the notification.3. The tribunal analyzed the requirements of the notification and the definition of a factory under the Act. It concluded that the unit met the criteria for being considered a factory, as Fusel Oil was an excisable product manufactured on the premises. The tribunal upheld the decision of the Collector (Appeals) and dismissed the appeal filed by the Revenue, citing no infirmity in the previous judgment. The application of the previous tribunal decision supported the respondent's case, leading to the dismissal of the Revenue's appeal.This detailed analysis highlights the key legal arguments, interpretations of relevant laws, and the application of previous decisions in resolving the issues raised in the case.