1992 (4) TMI 137 - AT - Central Excise

Tribunal Decision: Engineer's Supervision Counts Towards Worker Total Under Factories Act

The Tribunal upheld the Collector's decision, denying exemption to the appellants from licensing control and duty under the Factories Act. The dispute ... Factory - Number of workers Issues:1. Interpretation of the term 'factory' under the Factories Act, 1948 for exemption from licensing control and payment of duty.2. Determination of the number of workers employed with the aid of power to qualify as a factory under the Factories Act.3. Whether an Engineer visiting the factory for supervision can be considered a worker under the Factories Act.Analysis:1. The appellants argued for exemption from licensing control and duty, claiming they were not a factory under the Factories Act but registered under the Shops and Establishment Act. They contended that the Collector erred in including an Engineer who supervised production sporadically and two draftsmen and a clerk from the head office in the count of workers. The appellants cited relevant notifications and a Bombay High Court decision to support their position. The Tribunal noted the restoration of the term 'factory' by Notification No. 92/81/C.E. dated 1-4-1981 and defined a factory under Section 2(m) of the Factories Act. The dispute centered on the number of workers employed, with the appellants admitting to having nine workers with power facilities. The Tribunal found that the Engineer visiting for supervision could be considered a worker under the Act, leading to the denial of exemption. The Tribunal upheld the Collector's decision based on these findings.2. The crux of the issue was whether the appellants had ten or more workers employed with the aid of power to qualify as a factory under the Factories Act. The Tribunal examined the evidence provided by the appellants, including a letter and Muster Roll showing nine workers employed with power facilities. The appellants argued that the remaining persons, including the Engineer, should not be considered workers as they did not work within the factory premises. However, the Tribunal found that the Engineer's supervision of manufacturing activities on-site qualified him as a worker under the Act, contributing to the total count of workers. This determination was crucial in deciding the eligibility for exemption from licensing control and duty.3. The contentious issue revolved around whether an Engineer visiting the factory for supervision could be classified as a worker under the Factories Act. The appellants argued that the Engineer's role was administrative and not directly related to the manufacturing process. However, the Tribunal disagreed, stating that the Engineer's supervision of manufacturing activities, providing specific instructions, and ensuring compliance with standards qualified him as a worker under Section 2(1) of the Factories Act. This interpretation played a significant role in upholding the Collector's decision and dismissing the appeal.In conclusion, the Tribunal's judgment focused on interpreting the term 'factory' under the Factories Act, determining the number of workers employed with power facilities, and assessing whether an Engineer's supervision qualified as work under the Act. The decision highlighted the importance of compliance with statutory definitions and the impact of specific roles on the classification of workers within a manufacturing unit.