Separate factory status under excise exemption depends on excise licensing and records, not Factories Act registration alone.

Notification No. 198/76, as amended, required the assessee to satisfy Central Excise law requirements for treating units as separate factories, including a separate licence, approved ground plan and separate statutory records. Mere separate registration under the Factories Act was insufficient because the excise definition of "factory" governed entitlement to the exemption. As Plant No. 2 was not separately licensed and the records for both plants were maintained together, the two units were not accepted as separate factories for re-determination of base clearances. The refund claim was therefore held not admissible.

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Issues: Whether the assessee's Plant No. 1 and Plant No. 2 were separate factories for the purpose of Notification No. 198/76 as amended by Notification No. 20/77, so as to exclude the production of Plant No. 2 for re-determination of base clearances and refund.

Analysis: The exemption under Notification No. 198/76 was to be applied on the basis of the scheme of the Central Excise law and its rules, which required a separate licence, approved ground plan, and maintenance of separate statutory accounts for each factory. The assessee had not taken a separate Central Excise licence for Plant No. 2 and maintained only combined records for both plants, including combined declarations for base clearances. The definition of "factory" under the Central Excises and Salt Act, 1944 was not the same as the definition under the Factories Act, 1948, and the separate registration under the Factories Act did not control entitlement under the exemption notification. The notification had to be construed strictly at the stage of determining whether the assessee fell within its terms, and the factual position did not support treatment of the two plants as separate factories for the claimed benefit.

Conclusion: The claim that the two plants were separate factories for the purpose of the amended exemption notification was rejected and the refund was not admissible.

Ratio Decidendi: For an exemption based on clearance from more than one factory, the assessee must satisfy the Central Excise law requirements for separate factories, including separate licence and separate records; registration under the Factories Act alone is insufficient.

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