Separate industrial unit test governs transport subsidy eligibility despite common ownership and shared facilities.

A manufacturing unit is treated as a new industrial undertaking for transport subsidy purposes when it is a separate and identifiable unit with independent existence, even if there is common ownership, shared premises, or consolidated accounts. Relevant indicators included separate excise and tax registrations, separate labour and industrial recognition, independent power and pollution approvals, and distinct factory treatment by the authorities. On that basis, the second unit was regarded as a separate industrial unit, not a mere substantial expansion of the earlier unit. The request for interest on the subsidy amount was also not accepted, as no sufficient ground was shown to disturb the discretionary refusal.

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Issues: (i) Whether the second manufacturing unit was a separate industrial unit entitled to transport subsidy or merely a substantial expansion of the earlier unit; (ii) whether interest was payable on the subsidy amount found due.

Issue (i): Whether the second manufacturing unit was a separate industrial unit entitled to transport subsidy or merely a substantial expansion of the earlier unit.

Analysis: The governing test was whether the later undertaking was a new and identifiable unit, separate and distinct from the existing business, and not merely an enlargement preserving the physical identity of the old unit. The second unit had separate excise registration, separate sales tax and general sales tax certificates, separate labour and industrial recognition, separate power sanction and meter arrangements, independent pollution control clearance, separate registers, and was treated by the authorities themselves as a distinct factory and unit. The mere common ownership, common premises, shared infrastructure, and consolidated accounts did not destroy its separate character.

Conclusion: The second unit was a separate industrial unit and not a mere substantial expansion; entitlement to transport subsidy was upheld in favour of the respondents.

Issue (ii): Whether interest was payable on the subsidy amount found due.

Analysis: The claim for interest had been refused in the exercise of discretion by the Single Judge, and no sufficient ground was shown to disturb that determination.

Conclusion: The refusal to award interest was left undisturbed and was against the respondents.

Final Conclusion: The challenge to denial of transport subsidy failed, while the ancillary claim for interest also did not succeed.

Ratio Decidendi: A manufacturing unit is to be treated as a new industrial undertaking only when it is a separate and identifiable unit with its own independent existence, and common ownership or shared facilities do not by themselves convert it into a mere expansion of the existing unit.

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