2011 (1) TMI 991

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....aper Mills Ltd., have two factories, one at Unit No.1, Saoner, Nagpur and the other at Unit No.2, Saoner, Nagpur. In both these units they are engaged in the manufacture of paper and paper board falling under Chapter 48 of the CETA, 1985. Both the units are located on same piece of land having a common gate. They are divided only by a wall and barbed wire to show their independent identity. However, both the units have separate Central Excise registration and they also have separate registration under the Factories Act 1948. Both these units claimed exemption under Notification No.3/2001 dated 01/03/2001 in respect of paper and paper board or articles made there from cleared for home consumption upto the first clearances of an aggregate qua....

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....on 11AB of the Central Excise Act.   3. Aggrieved by the said order, M/s.Malu Paper Mills Ltd., filed an appeal before the Commissioner (Appeals), who vide order mentioned (supra) held that both the units have to be treated as separate factories as separate Excise registration have been granted to them after duly approving the ground plans submitted by the units and both the factories are registered separately under the Factories Act, 1948. He further observed that both the units have independent machinery for production of finished products and manufacture different varieties of papers. The lower appellate authority further observed that the Notification No.3/2001 granted exemption in respect of paper and paper board cleared from a....

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....ly as they are registered separately with the Central Excise department. The said exemption which was the predecessor to notification No.3/2001 pertained to paper and paper board if the aggregate clearance from a factory in a financial year did not exceed 3500 MT, which is also the position in the case before us. Similarly, in the case of Amaravathi S V Paper Mills Ltd., the hon'ble apex Court considered the eligibility to exemption on paper and paper board for the first clearance of 3500 MT of paper under Notification No.6/2000-CE dated 01/03/2000 and held that bifurcation of a factory into two to avail exemption separately would not disentitled them to separate exemption so long as the two units have the requisite equipment to manufacture....