Full Judgment
Moped Tool Room, were not distinct or separate entities and were not eligible for exemption under Notification No. 105/80-C.E., dated 19-6-1980 (as amended). He demanded the Central Excise Duty of Rs. 3,06,235.36. On appeal the Collector of Central Excise (Appeals), Madras, had set aside the order passed by the Assistant Collector of Central Excise, Madras. In his order, he had held as under : "I have carefully considered the submissions made by the learned consultant. I find that the entire order has been issued on wrong presumptions without any verifications of the goods produced or sold by the appellants. There is no evidence that for the period of demand i.e. 10-4-1985 to 18-10-1985, appellants have produced any mopeds or that the appellants have sold anything to their holding company i.e. Tansi. The order appears to have been passed entirely on surmise. Moreover, the show cause notice issued under Section 11A is not a notice inasmuch as appellants were not notified about the demand of any amount specified therein. Their classification lists filed for the year 1987-88 has also been not finalised yet and they are paying duty under protest. Therefore, there is no ground to state in the order that their clearances to Tansi henceforth will be charged at the price at which Tansi sells the goods to others, because this fact is not present and the appellants do not sell anything to Tansi since 1985 onwards. Therefore, the demand as well as the future direction, not being based on correct facts, are set aside and the appeal allowed without prejudice to finalisation of their classification list by the proper officer." The Revenue had pleaded that the appellate authority had not discussed the matter relating to the eligibility of small scale exemption and had vacated the adjudication order only on the ground of valuation.
2. We have heard Shri M. Jayaraman, JDR. No one is present for the respondents. The notice for today's hearing had already been served on them. The acknowledgement card is on record. As the matter is old in which the show cause notice had been issued in the year 1985, we proceed to deal with the matter on merits on the basis of facts on record and after hearing the representative of the Department.
3. Under Notification No. 105/80-C.E., dated 19-6-1980, the goods falling under Item No. 68 of the erstwhile Central Excise Tariff were exempted from the payment of Central Excise Duty subject to the conditions as laid down in that notification. One of the conditions was that the investment in plant & machinery in the industrial unit in which the goods falling under Item No. 68 were produced had not exceeded Rs. 20 lakhs. We find that in the grounds of appeal, the Revenue had stated as under : "1(a) Eligibility of Small Scale Exemption. - The Assistant Collector has held that the party is not eligible for the small scale exemption and has confirmed demand for a period of six months amounting to Rs. 3,06,235.36 on the ground that value of Plant and Machinery of all three units of M/s. Tamil Nadu Mopeds Ltd., namely (1) M/s. Moped Assembly and Sheet Metal Works, (2) Moped Machine Shop, (3) Moped Tool Room was Rs. 34,66,124.23 and had exceeded the 20 lakhs limit laid down in Notification No. 105/80, dated 19.6.1980." The Revenue had admitted that (1) M/s. Moped Assembly and Sheet Metal Works, (2) M/s. Moped Machine Shop, and (3) M/s. Moped Tool Room were three units of M/s. Tamil Nadu Mopeds Ltd. We find that before the adjudicating authority the assessee had pleaded that the three units in question were independent units situated in different premises and all the three were registered under the Factories Act.
4. The Asstt. Collector had observed that for the computation of value of plant and machinery, the aggregate value of plant and machinery of M/s. Tamil Nadu Mopeds Ltd., as a whole, had to be taken into account instead of the value of each individual unit. M/s. Tamil Nadu Mopeds Ltd. was engaged in the manufacture of different products which were classifiable separately under different Tariff items. They were not producing exclusively goods falling under Item No. 68 of the erstwhile Central Excise Tariff. The relevant proviso in Notification No.105/80-C.E. (as amended) read as under : "Provided further that an officer not below the rank of an Assistant Collector of Central Excise is satisfied that the sum total of the value of capital investment made from time to time on plant & machinery installed in the industrial unit in which the said goods under clearance are manufactured is not more than Rs. 20 lakhs." The adjudicating authority, in our view, had extended the area of the proviso and we consider that when the three units were separate, they were located at different places and were separately registered under the Factories Act, as per the provisions of the said notification, the investment in plant & machiery was not to be clubbed. The Revenue had not placed any material in support of their contention that the value of plant & machinery of all the three units of M/s Tamil Nadu Mopeds Ltd. were to be taken to determine the eligibility of different units for the benefit of Notification No. 105/80-C.E.5. Taking all the relevant facts and circumstances of this case into account, we do not find any merit in this appeal filed by the Revenue and the same is rejected. Ordered accordingly.