Factory definition under excise law excluded mine-based gold extraction, preventing levy on recovered gold.

Gold extracted from gold-bearing ore in premises treated as a mine was outside Item 68 excise levy because that item applied only to goods manufactured in a factory. The definition of "factory" adopted from the Factories Act excluded a mine subject to the Mines Act, so the extraction site did not qualify as a factory for excise purposes. On that statutory construction, the recovered gold did not fall within the charging item and was not exigible to duty.

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Issues: Whether gold recovered from gold-bearing ore in a mine was excisable under Item 68 of the First Schedule to the Central Excises and Salt Act, 1944, having regard to the meaning of "factory" in Section 2(m) of the Factories Act, 1948.

Analysis: Item 68 applied to goods manufactured in a factory, and the relevant explanation adopted the meaning of "factory" from Section 2(m) of the Factories Act, 1948. That definition expressly excluded a mine subject to the operation of the Mines Act, 1952. On the materials placed, the premises where gold was extracted from the ore were treated as a mine and not as a factory under the Factories Act. The exclusion from the statutory definition therefore prevented the recovered gold from falling within Item 68 for levy of excise duty.

Conclusion: The gold produced from the mine was not exigible to duty under Item 68, and the appeal succeeded in favour of the assessee.

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