Exemption for air-conditioning in factory test rooms applies where testing is incidental to manufacturing and product completion.

Air-conditioners installed in a fuel injection pump test room within a factory qualified for exemption under Notification No. 56/78 because the room was used for calibration, rigorous testing, resetting and setting up of pumps as part of the manufacturing process. Those operations were incidental and ancillary to completion of the finished product, and the air-conditioning was required for that work within factory premises. The exemption could not be denied on the footing that the test room was unconnected with manufacturing, and the concession was held admissible.

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Issues: Whether air-conditioners installed in a fuel injection pump test room within the factory were eligible for exemption under Notification No. 56/78.

Analysis: The notification extended concessional duty where the air-conditioners were required for use in establishments specified in the Schedule, including research and test laboratories and any factory. The activity carried on in the test room involved calibration, rigorous testing, resetting and setting up of fuel injection pumps before fitment on engines. These operations formed part of the manufacturing process and were incidental and ancillary to the completion of the finished product. The air-conditioning was required for those activities within the factory premises, and the test room was not shown to be an isolated premises unconnected with manufacturing.

Conclusion: The appellants were entitled to the benefit of Notification No. 56/78, and the denial of exemption was unsustainable.

Final Conclusion: The order denying the concession was set aside and the appeal succeeded on the exemption issue.

Ratio Decidendi: Where air-conditioning is required for a test room within a factory and the operations carried on there are incidental or ancillary to the manufacturing process, the benefit of an exemption notification covering use in any factory is available.

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