Factory-specific excise exemption applies separately to independently registered units after demerger when each satisfies notification conditions.

Notification No. 6/2000-C.E. was factory-specific for paper and paperboard manufactured from the stage of pulp, subject to the prescribed conditions. Where two units operated in separate premises after a court-approved demerger under Section 394 of the Companies Act, 1956, and each had separate excise and factory registrations, they were treated as independent factories. Common ownership, common boundaries, or inclusion in the same corporate group did not by themselves defeat the exemption if each unit was separately run and otherwise satisfied the notification requirements. On the stated facts, denial of the exemption was not justified, and the demand and penalties were held unsustainable.

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Issues: Whether two units operating in separate premises after a court-approved demerger, and separately registered under excise and factory laws, were entitled to avail Notification No. 6/2000-C.E. independently as separate factories.

Analysis: The exemption under Notification No. 6/2000-C.E. was factory-specific and applied to paper and paperboard manufactured from the stage of pulp, subject to the prescribed condition. The units here had been separated pursuant to a demerger sanctioned under Section 394 of the Companies Act, 1956, and both had obtained separate registrations under the Central Excise and Factories laws. The facts showed independent establishments, and the precedent on similar facts held that common ownership or common boundaries do not by themselves make two factories one unit when the establishments are separately run and otherwise independent. Since the Revenue did not show that the individual factories failed to satisfy the notification conditions, denial of the exemption was not justified.

Conclusion: The exemption was admissible separately to both units, and the demand as well as the penalties were unsustainable.

Final Conclusion: The appeals succeeded, and the assessee was held entitled to the benefit of the notification for each independent factory.

Ratio Decidendi: A factory-wise exemption cannot be denied merely because two independently registered and separately run factories have common ownership, common boundaries, or arise from the same corporate group, if each factory otherwise satisfies the exemption conditions.

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