1983 (11) TMI 301

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.... under Item 68 of the Central Excise Tariff and directed the appellants to pay the duty thereon for the period 1975-76 and 1976-77. 2. The appellants claim the following two reliefs from us :- (1) there should be no duty liability on pencil slats for the period from December, 1975 to July, 1976 on the ground that during this period or during the preceding 12 months they did not employ more than 49 workers in their factory, vide exemption Notification No. 54/75-C.E., dated 1-3-1975. (2) sawn timber and saw dust were only process waste or process residues which incidentally arose in the course of manufacture of pencil slats from log wood and as such they were neither "goods" nor any manufacturing process was involved in th....

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....e appellants, more than 49 workers were not working in their factory during December, 1975 to July, 1976 nor in any of the 12 actual months preceding, they would not be liable to duty during the said period. 4. Regarding sawn timber and saw dust, the appellants contended that they burnt these articles in their factory. The Department's representative, however, invited attention to their letter dated 12-5-1976 addressed to the Superintendent of Central Excise with which the appellants had enclosed a statement showing sale of sawn timber and saw dust to outside parties during 1975 and 1976. At this, the appellants stated that these articles were mostly burnt inside the factory and that the fact of their sporadic sale or marketability co....

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....ent article from timber log. It has, apart from burning as fuel, other uses also. It, therefore, satisfies the test laid down by the Hon'ble Supreme Court in the two cases relied on by the appellants in as much as it has a distinct name, character and use. The appellants' argument that it is only an incidental arising is answered by the Allahabad High Court judgment (1982 E.L.T. 937) cited by the Department's representative which, we find, is very specific on the point. The High Court has held that the word `production' in Section 3 of the Central Excises Act is used in juxtaposition with the word `manufacture' and obviously refers to finished and semi-finished article made from raw material. Therefore, any by-product or intermediate or res....