TaxTMI 
TaxTMI 
2004 (6) TMI 227
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....e of printing and writing paper (falling under heading 48.02 of the CETA Schedule) and MG Paper Machine for manufacture of kraft paper (48.05). They were also availing the benefit of exemption for the first clearance of 3,500 M.Ts. of paper under Notification No. 6/2000-C.E., dated 1-3-2000 as amended by Notification No. 36/2000-C.E., dated 4-5-2000. While so, on 14-7-2000, they submitted an application under Rule 174 for deleting the MG paper-making portion of the factory from its existing ground plan and for separate registration of that portion in the name of M/s. Rajalakshmi Paper Mills Limited - Unit II. The Assistant Commissioner of Central Excise rejected the application, holding that the request for bifurcation of the factory and separate registration of Unit II under Rule 174 had been made with the mala fide intention to take undue advantage of the exemption benefit under Notification No. 6/2000-C.E., (as amended). Against this decision of the original authority. Unit II of M/s. Rajalakshmi Paper Mills Ltd. (present respondents) preferred an appeal to the Commissioner (Appeals) and the latter allowed the appeal. Hence the present appeal of the Revenue. 3.The essential f....
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.... (i) Grauer & Weil (India) v. C.C.E., 1994 (74) E.L.T. 481 (S.C.) (ii) Bongaigaon Refinery & Petro Chem. Ltd. v. C.C.E., Calcutta, 1994 (69) E.L.T. 193 (Cal.) (iii) Rollatainers Ltd. v. C.C.E., Delhi, 2002 (150) E.L.T. 383 (Tri. - Del.). It was submitted that, in view of the above case law, the finding of the Commissioner (adjudicating authority) that the Notification was factory-based was not correct. The question whether the two manufacturing units of each company were to be treated as one factory or not should be examined with reference to the definition of "factory" under the Factories Act as in the case of Grauer & Weil (India) Ltd. (supra). The two units of each company was working on a common plot of land, using common utilities such as water supply, steam, power etc. They were under a common administration and were maintaining a common Bank account. Common fund was used for the purchase of raw materials and capital goods. In view of these commonalities, the units should have been treated as a single factory, argued ld. JCDR. He stressed the ....
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....l. No. 77 of the Table annexed to the above Notification. The exemption was subject only to one condition, which was mentioned as condition No. 15 in the Annexure to the Notification. This condition exclusively laid down that the exemption shall apply only to the paper and paper board cleared for home consumption from a "factory" on or after the first day of April, 2000 upto first clearances of an aggregate quantity not exceeding 3,500 M.Ts. Counsel pointed out that it was clear from the above wording of Condition No. 15 that the exemption in terms of Sl. No. 77 of the Table annexed to Notification No. 6/2000-C.E. (as amended), was available to paper cleared for home consumption from a factory. Unit II was a factory with separate Central Excise registration during the period of dispute and, therefore, its first clearances upto 3,500 M.Ts. in the financial year 2000-01 were to be exempted from payment of duty. 6.A further argument advanced by Shri V.M. Doiphode was that, though Rule 174 authorised the proper officer of Central Excise to grant separate registration to two or more units of the same manufacturer, the Rule did not expressly authorise revocation of such registration. ....
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....ate registration certificates had been issued to the two units by the Government of Tamil Nadu. He directed the lower authority to issue new registration certificate in respect of Unit II after verification of the particulars furnished by the company. In the Revenue's appeal against the decision of the Commissioner (Appeals), the main ground of challenge is that the Commissioner (Appeals) had failed to appreciate the 'colourable device' of bifurcating the parent unit with intent to avail undue benefit of exemption under Notification No. 6/2000-C.E. (as amended). With regard to this ground, we find that the company had resolved to bifurcate their manufacturing unit into (Units I and II) as early as on 7-2-2000 as evidenced by a certified copy of the relevant resolution of the Company's Board Meeting, available on record. This Resolution of the Company was prior to the issuance of the subject Notification. Hence it will be incorrect to presume that the decision to bifurcate the manufacturing unit was taken with mala fide intention of availing undue benefit under the Notification. The correspondence between the Company and the Assistant Commissioner of Central Excise indicates that it....
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....ification. This entry reads as :- 77 48 Paper and paperboard or articles made therefrom manufactured, starting from the stage of pulp, in a factory, and such pulp contains not less than 75% by weight of pulp made from materials other than bamboo, hard woods, soft woods, reeds (other than sarkanda) or rags. Nil - 15 The exemption was subject to condition No. 15 which reads as under : - "15. (1) This exemption shall apply only to the paper and paperboard cleared for home consumption from a factory - (a) during the period from 1st March, 2000 to 31st March, 2000, upto first clearances of an aggregate quantity not exceeding 210 Metric Tonnes; and (b) on or after the 1st day of April, 2000, in any subsequent financial year upto first clearances of an aggregate quantity not exceeding 3500 M.Ts. vide Notification No. 36/2000, dated 4-5-2000." (Emphasis added) According to the above condition, the exemption was applicable to paper and paperboard cleared for h....
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....during the relevant periods of dispute. The relevant demands of duty were raised in respect of periods during which the registration certificates were in operation. Hence the Revenue cannot be heard to contend that the respondent-Units were not separate factories during the period of dispute. The case law relied on by the JCDR does not seem to support the Revenue's case. We have already distinguished the case of Grauer & Weill (supra) by observing that, in that case, the exemption Notification which was considered by the apex Court expressly required that the expression "factory" had to be understood as defined under Section 2 (m) of the Factories Act. The Calcutta High Court's order in Bongaigaon Refinery & Petrochem Ltd. v. CCE. [1994 (69) E.L.T. 193 (Cal.)], relied on by the JCDR, was only a remand order and we have not found any binding precedent therein. In the case of Rollatainers Ltd. (supra), this Tribunal considered Notification No. 6/2000-C.E. (as amended), and examined the question whether the benefit of the Notification was available to separate divisions of the company. It was found that both the divisions were situated in the same premises and, therefore, they could n....