1988 (3) TMI 341

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....ured and removed by them during the period 1-4-1975 to 15-3-1976. The allegation against them, stated in short, was that they were not eligible for benefit of duty free removals in respect of the periods during which they had respectively manufactured the readymade garments since the manufacture was in the same factory and the total clearances had exceeded the duty free exemption limit. On adjudication the Collector of Central Excise, Bombay-1, under his order dated 29-7-1981 directed exemption be granted to the two appellants proportionately out of the duty free clearances of Rs. 5 lakhs for the year and demanded duty in respect of the balance of clearances. He further imposed a penalty of Rs. 25,000.00 on each of the appellants. On appeal....

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....t of exemption (out of the Rs. 5 lakh limit) prorata to each of the appellants. Therefore, in effect, the Collector did recognise and accept that the two appellant firms were separate and distinct. He held that, even so, benefit of exemption up to Rs. 5 lakhs was not available to each of the appellants since the manufacturing activity of both appellants was in the same factory. Proviso 2 of Notification 150/71 read as follows :- "Where a factory producing articles of ready-to-wear apparel is run at different times of any financial year by different manufacturers, the value of such articles of ready-to-wear apparels so cleared from such factory and in any such year at nil rate of duty shall not exceed rupees five lakhs." It is on the b....