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of <h1>Appeal granted, order set aside, Unit No.III qualifies as separate industrial unit under Notification No.50/03-CE</h1> <h3>Wipro Enterprises Limited Versus CCE, Shimla</h3> Wipro Enterprises Limited Versus CCE, Shimla - TMI Issues Involved:1. Whether the benefit of Notification No.50/03-CE dated 10.6.2003 can be denied to Unit No.III on the ground that it was not an independent industrial unit but an addition to the existing unit.Issue-wise Analysis:1. Denial of Exemption Based on Independence of Unit No.III:The appellants challenged the denial of exemption under Notification No.50/03-CE for Unit No.III, which commenced production on 18.8.2004. The department argued that Unit No.III was not an independent unit but an addition to the existing unit, thus not qualifying for the exemption. The appellants contended that Unit No.III was a distinct industrial unit with an independent civil structure, separate facilities, unique production line, independent workforce, and separate plant and machinery. They argued that the term 'industrial unit' should be interpreted as an isolable and self-sustainable part of a factory capable of manufacturing goods independently, citing several case laws to support their position.2. Common Facilities and Independent Existence:The appellants argued that the use of common facilities such as electricity sub-station, generator set, water source, and effluent treatment plant should not impact the independent existence of Unit No.III. They asserted that even if Unit No.I were to close, it would not affect the functioning of Unit No.III, as it could continue to use the common facilities. They cited the Hon'ble Apex Court's decision in Rollatainers Ltd., which held that sharing certain infrastructural requirements does not affect the existence of separate units.3. Compliance with Notification Conditions:The appellants provided declarations and evidence to show compliance with the conditions of Notification No.50/03-CE. They argued that all units had separate inputs, final products, factory buildings, plant and machinery, employees, and bank accounts. The tribunal noted that the appellants had complied with the notification's requirements by filing due declarations and starting production in different units with different inputs and final products.4. Interpretation of 'Industrial Unit' vs. 'Factory':The tribunal examined the distinction between 'industrial unit' and 'factory,' citing various case laws. The Hon'ble Bombay High Court in Devidayal Electronics and Wires Ltd. defined an industrial unit as a separate or isolable part of a complex concerned with industry. The Hon'ble Apex Court in Himalayan Co-op Milk Product Union Ltd. and Reckitt Colman of India Ltd. supported the view that an industrial unit is distinct from a factory and should be treated as a separate entity for exemption purposes.5. Relevance of CBEC Circulars:The tribunal found that the CBEC circular No.939/29/2010-CX dated 20.10.2010, which dealt with the installation of additional plant and machinery after the cut-off date, was not applicable as the appellant had started production before the cut-off date. The circular No.960/03/2012-CX dated 17.2.2012, addressing different issues, was also deemed irrelevant to the appellant's case.6. Common Facilities and Separate Units:The tribunal referred to the Hon'ble Patna High Court's decision in Hindustan Malleables and Forgings Ltd., which held that common facilities like power supply and management do not destroy the independent identity of separate units. The Hon'ble Apex Court in Rollatainers Ltd. also supported the view that common boundaries or facilities do not make separate units one factory.7. Tribunal's Conclusion:The tribunal concluded that the factory and industrial unit are two different connotations, and a factory can have multiple industrial units. It held that the appellant's three units, having separate plant and machinery, inputs, manpower, finances, and manufacturing different products, qualified as separate units. Consequently, Unit No.III was entitled to the exemption under Notification No.50/03-CE.Judgment:The impugned order was set aside, and the appeal was allowed with consequential relief. The tribunal emphasized that the exemption under Notification No.50/03-CE applies to industrial units, not factories, and sharing common facilities does not negate the independent status of separate units.
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