Separate factory status preserved concessional exemption where two units had independent labour, power, registrations and licences.

Clearances from two manufacturing units were not required to be clubbed for the concessional exemption under Notification No. 6/2002-CE because the units were found to be separate factories. The decision turned on objective indicia of separateness, including distinct labour, independent electricity connections, separate registrations and separate statutory licences. Applying the principles in Rollatainers and Amaravathi S. V. Paper Mills, common premises or common management alone was treated as insufficient to make the units one factory. The exemption therefore remained available separately to each unit, and clubbing-based denial was not justified.

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Issues: Whether the two manufacturing units were separate factories entitled to claim the concessional exemption under Notification No. 6/2002-CE separately, or whether their clearances were required to be clubbed for the purpose of the 3500 MT limit.

Analysis: The exemption was framed with reference to clearances from a factory, and the question was whether the two units, though situated in the same premises and under common management, were in substance one factory. The record showed separate labour, separate electricity connections, separate registrations, and separate statutory licences for the units. The distinction drawn by the Supreme Court in Rollatainers and Amaravathi S. V. Paper Mills was applied, namely that mere common premises or common management does not by itself make two factories one and the same.

Conclusion: The units were held to be distinct and separate factories, and the exemption could not be denied by clubbing their clearances. The appeals were allowed in favour of the assessee.

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