TaxTMI 
TaxTMI 
TaxTMI 
2004 (3) TMI 571
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....ssitated to implement product group management concept and to give greater flexibility and more freedom in decision making, manufacturing as well as marketing of the products. They also requested for separate Central Excise Registration of these two premises to be carved out of the original site. Relying on the reasons and information provided by M/s. KSF, the alteration in the manufacturing site was allowed and two parts were created by erecting a boundary wall and after making other changes in the ground plan. These physically separated sites were given separate Central Excise registration with effect from 26-4-2000. The existing registration was amended and it was endorsed in the name of M/s. KSF (processed yarn unit). The premises carved out of the old unit having facilities for manufacture of POY was given separate registration Number. After investigation, it was revealed that M/s. KSF (Prop. CEL) had misled the Central Excise Department by misstating the facts in order to separate the existing manufacturing premises into two premises in order to claim benefit of Notification No. 6/2000, dtd. 1-3-2000 which was not admissible to erstwhile unit of M/s. KSF, which was composite ....
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....pplication for registration or any amendment in the existing registration. (e) That the R.I. application dated 16-3-2000 is also invalid in law as the said unit was not in existence on the date of application also it is not legal person as required under Rule, 1944. It was also not in existence even on date of registration. The signatory to this R-I application has claimed to be authorised signatory of M/s. KSF (POY) unit which is factually wrong as no such authorisation. (f) That the premises continued to be one premises even after so called bifurcation. (g) That the single composite unit M/s. Konkan Synthetics Fibres (Prop CEL.) continued to function as one single unit even after so called bifurcation. (h) That there was clear violation and breach of provision and conditions of Rule 174 CER, 1944. (i) That there was contravention of Rules 42, 43 & 44 of Central Excise Rules, 1944. (j) That the two separate registrations are revocable in terms of Rule 174. Accordingly he revoked two registration and restored the original position. He also imposed penalty of Rs. 1,00,000/- each on all the Noticees. Aggri....
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....Administration, Purchase, etc., relating to those products. The different product groups formed out of various products manufactured at above said three sites are as below: Product Group Name Products manufactured at different sites POY Chips, POY Textile Yarn (Processed Yarn) PFY. NFY (Processed yarn) Industrial Yarns Industrial Yarn and fabric Implementing the Product Group concept at Mahad site was becoming difficult since the very few number of High Speed Spinning (USS) Machines resulted in a limited capacity for producing POY. However, to ensure smooth changeover to Product Group concept, initially an exception was made so that the HSS machine and its product POY was continued to be managed by the Product Group - Textile Yarn. Due to difficulties, we have not been successful in achieving the basic objective of the Product Group concept in the true sense. As, by now the product groups are functioning smoothly, in order to conclude the changeover and to further consolidate the new management structure, it has now been decided to hand over the total control/management of the HSS machines at Mahad to the Product Group - POY. This will not only enable the Product Group to....
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....ured or Draw Twisted (Processed) Yarn will be continued to be exempted. Further in view of the applicability of specific duties, the Processed Yarn unit will not be availing CENVAT credit either on inputs or on capital goods. You are therefore requested to grant us the registration at an early date .We will be pleased to provide you any further information in this regard." 3. From the above, it is seen that prior to the concept of Product Group Management, the respondents used to follow the Site Management System irrespective of different types of products, so as to maximise products and profits. However, due to certain difficulties such as building up of inventory, crash in prices of product, demand not matching supplies etc. the Product Group Management concept was created whereunder, everything other than the corporate functions, right from purchases, marketing, production facilities, maintenance, stores etc. were placed under control of the "product head" irrespective of the site or functional area. The Product Group Management System was implemented in a restricted manner since 1998 and in July 1998 certain types of products manufactured at three different sites viz. Pu....
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....0 which was provided by the respondents. On 11-4-2000, the jurisdictional Range Supdt. informed the respondents that a separate compound wall, ground plan, in-out gate, BSR etc. must be made, as he had been directed to issue a new Registration certificate to KSF (POY). They initially erected with barbed fencing with a temporary gate and later put up new construction in the form of compound wall, sorting/packing building, security office, separate in-out gate etc. Changes were also made in existing structures and buildings in both KSF (POY) unit as well as KSF (PYU) unit. Once these separate licences were granted, the respondents also made other changes such as (1) Transfer of KSF (POY) managerial, administrative, financial and over all control from the Product Group - 'Textile Yarns' to the Product Group Head - 'POY'. (2) Bifurcation of quality control department (3) Transfer of all employees concerned with POY production, maintenance, stores, purchase, finance etc. to KSF (POY), (4) Segregation of accounting functions of both units, (5) separation of tax deduction system including deposit of TDS and TDS returns, (6) Segregation of separate stores department, (7) setting up of sepa....
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....ivision of M/s. Century Enka Ltd. Further application for L. 4 licence in 1989 was made by erstwhile M/s. KSF and in 1992 when Central Excise registration was required instead of licence, it was the erstwhile KSF that made the application and was also granted Central Excise Registration. At no point of time did the Excise Authorities raise the issue that a Division of a company could not make such application. It is also to be noted that the respondents company had given Power of Authority to the Factory Manager Shri D.B. Roongatha to enable to apply for all licences etc. for Century Enka Ltd. 7. The two premises in question clearly constitute two totally separate factories which have been separately registered. In the case of CCE v. Broach Textile Mills Ltd. [1998 (79) ECR 411], the Tribunal has held that the registration cannot be denied to separately registered premises, which function as two different factories. The contention of the Revenue that the respondents put up a fence for creating the new factory for the sole purpose of wrongly availing the benefit of Notification No. 6/2000 and therefore, the respondents' request for separate registration should not have been co....