Factory-location test governs steam exemption; manufacture outside the licensed premises defeats notification benefit.

Steam manufactured in boilers installed on land excluded from the sugar mills' approved factory plans did not qualify for exemption under Notification No. 118/75-C.E. because the goods were not produced within the factory premises of the sugar mills. The exemption applied only where manufacture occurred in a factory and the goods were intended for use in that factory or another factory of the same manufacturer. The exclusion of the land from the licensed and declared factory area showed that the boiler site was outside the factory premises, and the fact that the steam was supplied to the sugar mills was not sufficient to satisfy the notification.

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Issues: Whether steam manufactured in boilers erected by the appellant in areas excluded from the sugar mills' ground plans was entitled to exemption under Notification No. 118/75-C.E. dated 30-4-1975.

Analysis: The exemption applied only where the goods were manufactured in a factory and were intended for use in that factory or in another factory of the same manufacturer. The sugar mills had themselves sought exclusion of the land from their approved factory plans to make room for the boilers, which meant that the boilers were not situated within the factory premises of the sugar mills. The licensing and declaration requirements under the Central Excise Rules also showed that the premises of manufacture had to be specifically identified and that the excluded areas were no longer part of the licensed factory premises. In interpreting the exemption, the relevant test was the actual factory location and the identity of the manufacturer, not the mere fact that the steam was supplied to the sugar mills.

Conclusion: The steam did not satisfy the conditions of the notification and the exemption was not available.

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