1999 (1) TMI 189 - AT - Central Excise

Tribunal grants exemption for furnace lining materials used within factory premises /86

SAIL Versus COMMISSIONER OF C. EX., BHUBANESHWAR

SAIL Versus COMMISSIONER OF C. EX., BHUBANESHWAR - 1999 (112) E.L.T. 928 (Tribunal) Issues:Classification of goods for exemption under Notification No. 281/86 based on manufacturing location - Workshop vs. Factory distinction.Analysis:The appellants, engaged in iron and steel product manufacturing, claimed Notification No. 281/86 benefit on ramming mass and burnt dolomite used for lining furnaces. The department denied the benefit, arguing these items were factory-manufactured. The appellants contended these goods were workshop-manufactured within the factory, thus eligible for exemption. They cited relevant tribunal decisions supporting their stance.The JDR for the respondent contended workshop and factory have distinct meanings, asserting ramming mass and burnt dolomite were factory-made, rendering the notification inapplicable. He suggested the appellants might be selling parts of these goods to third parties while seeking exemption. He disagreed with the tribunal's interpretation in a previous case equating workshop with factory.After reviewing submissions and evidence, the tribunal noted the use of ramming mass and burnt dolomite for furnace lining within the factory was undisputed. Citing the Notification, the tribunal emphasized exemption for goods made in a workshop for machinery repair within the factory. Referring to past decisions, it held that the manufacturing area within the factory could be considered a workshop. As the goods were used for furnace repair, meeting the notification's intent, the tribunal ruled in favor of the appellants, granting them the exemption.The tribunal's decision clarified that the location of manufacturing, whether workshop or factory, was not decisive as long as the goods were used for machinery repair within the factory premises. The ruling emphasized the purpose of the Notification and the technical aspects of furnace lining, concluding that the appellants qualified for the exemption under Notification No. 281/86. The appeals were allowed, providing consequential relief to the appellants as per the law. Additionally, the Stay Petition No. SP-119/93 was also disposed of in the same judgment.