Unit-wise excise exemption under Notification No. 50/2003-CE applies where distinct manufacturing units operate within one factory.

Notification No. 50/2003-CE was applied on a unit-wise basis rather than as a factory-wide exemption, because the scheme was framed for new industrial units or existing units undertaking substantial expansion. The expressions "factory" and "industrial unit" were treated as distinct, and identifiable sections of a factory carrying separate manufacture could qualify as separate units for the notification. The wider definition of "factory" under the Central Excise Act could not override this unit-based design. Following the assessee's earlier case, denial of the benefit on a factory-wide approach was unsustainable, and the exemption was held available unit-wise.

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Issues: Whether exemption under Notification No. 50/2003-CE was to be applied unit-wise or factory-wise, and whether the assessee's separate manufacturing units were independently entitled to the benefit.

Analysis: The exemption notification was framed for new industrial units or existing industrial units undertaking substantial expansion, and not for a factory as a single composite entity. The expressions "factory" and "industrial unit" were treated as carrying different meanings, and each identifiable section or part of a factory engaged in distinct manufacture could be regarded as a separate unit for the purpose of the notification. The wider definition of "factory" under Section 2(e) of the Central Excise Act, 1944 could not override the unit-based scheme of the exemption. Applying the earlier decision in the assessee's own case, the denial of benefit on a factory-wide basis was unsustainable.

Conclusion: The exemption was held to be unit-wise, the impugned order was set aside, and the appeals were allowed in favour of the assessee.

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