2011 (6) TMI 405 - AT - Central Excise

Denial of application for single/common registration of two Units of assessee situated across the road - Commissioner rejected the plea holding that the process of manufacture of the two Units of appellant company cannot be treated as having interlinkage; that raw materials are not common for the Units; electricity connection is not common; that no documentary evidence regarding common sales tax, common income tax assessment was produced - Held that - Normally two manufacturing units of any manufacturer, are required to take separate registrations in terms of the conditions, safeguards and procedures prescribed in notification No. 35/2001. However, notification No. 36/2001 provides for relaxations and in certain cases common registration is provided for. The Board has given guidelines as to circumstances in which two premises can be treated as part of the same factory. Commissioner s finding that the two units are not interlinked in the process of manufacture on the ground that what was manufactured in unit 1 is being used in unit 2 is clearly erroneous and contrary to Board s guidelines, order of the Commissioner set aside and remand the matter to the Commissioner, Appeal allowed by way of remand.

Summary

Issues:
1. Rejection of application for single registration for two Units by the Commissioner.

Analysis:
The appeal was against the Commissioner's order rejecting the application for single registration for two Units owned by the appellants situated across the road from each other. The appellant sought combined registration for Unit No. 1 and Unit 2, claiming interlinkage between the manufacturing processes of the two units. The Commissioner denied the common registration primarily on the grounds that there was no interlinkage in the manufacturing processes, common raw materials, electricity connection, or documentary evidence regarding common sales tax and income tax assessment.

The appellant submitted a miscellaneous application to introduce additional evidence, including common income tax returns, a certificate of sales tax registration, and other documents to demonstrate common work force and management between the two units. The Tribunal allowed the application, considering the relevance of the documents to the disputed issue as per the Board's guidelines, and proceeded with the final disposal of the appeal.

Upon detailed examination, the Tribunal found that the Commissioner's finding of no interlinkage between the manufacturing processes of the two units was erroneous and contrary to the Board's guidelines. The Tribunal noted that the appellant had obtained common income tax returns and other documentary evidence, which were not available during the original proceedings before the Commissioner. Recognizing the importance of these documents in determining common registration eligibility, the Tribunal decided to set aside the Commissioner's order and remand the matter for reconsideration.

The Tribunal emphasized that common registration under notification No. 36/2001 should be evaluated based on relevant indicators as per the Board's guidelines, and each case should be considered individually. The Tribunal granted the parties an opportunity to present all relevant evidence before the Commissioner for a fresh decision, with a deadline set for the decision to be made by the end of the year, ensuring a fair hearing and due process.

In conclusion, the appeal was allowed by way of remand, and the miscellaneous application was disposed of, providing the appellants with the opportunity to present additional evidence for the reconsideration of their application for common registration of the two Units.