1985 (1) TMI 308 - AT - Central Excise

Summary

Issues:
1. Whether a Central Excise licensee can be compelled to include in ground plans for his premises the adjoining factory producing exempted excisable goods.
2. Whether two units manufacturing different products in separate premises can be considered a composite mill requiring a single license.

Detailed Analysis:
Issue 1:
The central issue in this case was whether a Central Excise licensee, already licensed for manufacturing dutiable goods, could be forced to include in the ground plans for his premises the adjoining factory producing exempted excisable goods. The appellant had been manufacturing sheets/circles of copper and copper alloys, including exempted billets stored in the premises alongside other materials. The Collector contended that both units should be covered by a single license due to their interdependence and common partners. The appellants argued that the exemption for billets and the absence of a requirement for a license for exempted goods manufacturing units supported their position. The Collector's decision to require a single license for both units was based on the composite nature of production and lack of separate registration under the Factories Act.

Issue 2:
The secondary issue revolved around whether two units manufacturing different products in separate premises could be considered a composite mill necessitating a single license. The Collector argued that the two units were interdependent due to common partners and operations, thus requiring a single license. However, the appellants contended that the separate nature of the units, as evidenced by a boundary wall, exempted billets, and lack of requirement for a license for exempted goods units, justified separate licenses. The appellants relied on legal precedents emphasizing the separate identity of units even if located in the same area with common elements. The Tribunal ultimately agreed with the appellants, emphasizing the separate nature of the units, the exemption for billets, and the lack of legal basis for requiring a single license for the composite mill.

In conclusion, the Tribunal set aside the Collector's decision and allowed the appeal, ruling in favor of the appellants. The judgment highlighted the distinct nature of the units, the exemption for billets, and the lack of legal grounds for compelling a single license for the composite mill. The decision underscored the importance of separate licenses for units engaged in manufacturing different products, even if located in close proximity with common elements.