M/S PUNJAB FOOTWEAR LIMITED, JALANDHAR versus COLLECTOR OF CENTRAL EXCISE, CHANDIGARH

Citation: [1994] SUPP. 5 S.C.R. 202 · Decided: 26-10-1994 · Supreme Court of India · Bench: R.M. SAHAI · Disposal: Dismissed

Judgment (excerpt)

A 
B 
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D 
E 
F 
G 
H 
MIS PUNJAB FOOTWEAR LIMITED, JALANDHAR 
v. 
COLLECTOR OF CENTRAL EXCISE, CHANDIGARH 
OCTOBER 26, I 994 
[R.M. SAHAI AND N.P. SINGH, JJ.] 
Excise-Notification No. 88 of 1977 CE dated 9.5.1977-Claim of 
benefit 
of-Manufacturing of footwears-Agreement 
between 
two 
factories-Workers of one factory working within precincts of another 
factory-For purpose of considering claim of benefit of Notification number 
of workers working in both factories to be taken into consideration. 
The process of manufacturing of footwears is partly done by the 
appellant and partly by Mis Stepwell Industries Ltd. on behalf of the 
appellant on the basis of an agreement entered into between the 
appellant and the said Mis Stepwell Industries Ltd. In view of the terms 
of the agreement, the workmen of Mis Stepwell Industries Ltd. were 
working on the machines installed within the premises of the appellant, 
for purpose of the part of the manufacture of footwears. They were also 
entitled to use the electricity from the meter of the appellant and had to 
pay the charges for the same. The agreement says that the possession of 
the premises shall remain with the appellant, but Mis Stepwell 
In~ustries Ltd. shall have 'licence of entering the premises to work on 
the mach_ines'. It was also stipulated that 'the maintenance of the 
machinery and its operation would be the responsibility' of Mis 
Stepwell Industries Ltd. 
In respect of the claim of the appellant for benefit under 
Notification No. 88 of 1977 dated 9.5.1977, the Collector of Central 
Excise held that the number of workmen directly employed by the 
appellant as well the number of workmen employed by Mis Stepwell 
Industries are to be counted and as the number of workmen of both the 
factories exceeded 49, the appellant was not entitled to the benefit of 
aforesaid Notification. On appeal, the Customs, Excise and Gold 
(Control) Appellate Tribunal affirmed the findings of the Collector and 
dismissed the appeal. 
This appeal has been filed against the Order of the Appellate 
Tribunal. The appellant submitted that in view of the proviso (i) to the 
Notification, the appellant was entitled to the benefit of the Notification 
202 
PB. FOOTWEAR LTD. v. COLLECTOR OF C. EXCISE [N.P. SINGH, J.] 
203 
because the footwears were being produced by or on behalf of the A 
appellant which shall be deemed to be manufacturer in one or more 
factories. It was pointed out that Mis Stepwell Industries shall not be 
deemed to be a factory belonging to the appellant, and as such the 
workmen of Mis Stepwell Industries should not be counted for 
purposes of granting or refusing benefit of the Notification. 
B 
Dismissing the appeal, this Court 
HELD : In view of the terms of the agreement between the. 
appellant and Mis Stepwell Industries Ltd., the workmen of Mis 
Stepwell Industries had to work within the premises of the factory of 
the appellari"t. In this background, it cannot be said that the workmen C 
of Mis Stepwell Industries were not working within the precincts of the 
factory of the appellant. As such while calculating the number of 
workers; their workers of Mis Stepwell Industries have to be taken into 
account. There is no dispute that if the workers of Mis Stepwell 
Industries are taken as working within the precincts of the appellant, 
then the number of workers was in excess of 49, mentioned in proviso. D 
(i) of the Notification No. 88 of 1977 CE dated 9.5.1977. The benefit of 
the Notification in view of proviso (i) can be extended only to such 
manufacturers in whose factory including the precincts thereof, not 
more than 49 workers are working on any day of the preceding 12 
months. As within the precincts of the factory of appellant more than E 
49 workers were working including the workers of Mis Stepwell 
Industries, the appellant shall not be entitled to the benefit of the 
notification. (205-G-H, 206-A) 
CIVIL APPELLATE JURISDICTION 
1986. 
Civil Appeal No. 3723 of 
From the Judgment and Order dated 10.6.86 of the Customs, Excise 
and Gold (Control) Appellate Tribunal, New Delhi in A.No. E.L. (SB) (T) 
A. No. 945of1981. 
F 
V. Sridharan, T. Ramesh, and V. Balachandran for the Appellant. 
G 
Joseph Valla Pally and A.K. Srivastava for the Respondent. 
The Judgment of the Court was delivered by. 
N.P. SINGH, J. Mis Punjab Footwear Limited, the appellant, have 
been manufacturing footwears. It appears that the process of manufacturing H 
204 
SUPREME COURT 

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