Composite plant units treated separately for duty eligibility due to physical separation and separate licenses. Appeal rejected.

The Tribunal determined that two units, despite being part of the same composite plant, were to be treated as independent factories due to their physical separation and separate licenses. As a result, the appellants were deemed ineligible for the concessional duty under Notification No. 124/87-CE as the clinker used for cement production was not manufactured in the same factory. The appeal and cross-objection were both rejected by the Tribunal.

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Issues Involved:
1. Eligibility for concessional duty under Notification No. 124/87-CE.
2. Interpretation of the term "same factory" under the Central Excises and Salt Act, 1944.
3. Relevance of other legal provisions and precedents to the case.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional Duty under Notification No. 124/87-CE:
The appellants filed a classification list under Rule 173B on 13-5-1987, claiming the benefit of Notification No. 124/87-CE, dated 29-4-1987, which prescribed a concessional rate of duty on cement manufactured out of clinker produced in the same factory. The Assistant Collector rejected this claim on 21-9-1987, stating that the clinkering and grinding units were separate, thus not satisfying the condition that cement should be manufactured from clinker produced within the same factory. The Collector (Appeals) confirmed this order. The appellants contended that both units, despite being 15 kilometers apart, were part of the same composite plant, owned and controlled by M/s. Mysore Cements, and should be treated as a single establishment under the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961. They also referenced a Certificate of Eligibility for Deferment of Payment of Sales Tax, which treated the units as part of the same factory for sales tax purposes.

2. Interpretation of the Term "Same Factory" under the Central Excises and Salt Act, 1944:
The key issue was whether the two units could be considered the same factory for the purposes of the exemption under Notification No. 124/87-CE. The term "factory" is defined in Section 2(e) of the Central Excises and Salt Act as "any premises, including the precincts thereof, wherein or any part of which excisable goods other than salt are manufactured." The Tribunal referred to several legal precedents, including the Bongaigaon Refinery and Petro Chemical Ltd. case, where the Calcutta High Court held that a "factory" includes only the premises and the precincts thereof wherein excisable goods are manufactured. The Tribunal also cited the Birla Jute and Industries Ltd. case, which held that separate licenses under Rule 174 of the Central Excise Rules indicate separate factories, even if connected by a conveyor belt.

3. Relevance of Other Legal Provisions and Precedents:
The appellants argued that for sales tax purposes and under the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961, the two units were treated as part of the same industrial undertaking. However, the Tribunal held that these decisions were not relevant for determining eligibility for exemption under the Central Excise Rules. The Tribunal also dismissed the relevance of the clarification issued by the Ministry of Industry in the case of M/s. Narbada Cements, stating that it could not override the statutory definition of "factory" under the Central Excises and Salt Act. The Tribunal further referenced the Cothas K. Prakash case, which examined the definition of "factory" under the Factories Act, but concluded that the definition under the Central Excises and Salt Act was more pertinent for this case.

Conclusion:
The Tribunal concluded that the two units of the appellants, being 15 kilometers apart and having separate Central Excise Licenses, must be treated as independent factories. Consequently, the clinker used for cement production was not manufactured in the same factory, and the appellants were not eligible for the exemption under Notification No. 124/87-CE. The appeal and the cross-objection were both rejected.

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