2013 (3) TMI 361 - AT - Central Excise

Interpretation of Notification No. 29/2004-Central Excise - Concessional rate of duty - Manufacturer who does not have facilities in his factory for the manufacture of filament yarn of Chapter 54 - The contention of the Revenue is that PFY Division in Jolwa and D.T. Division in Jolwar have to be treated as one factory. - Separate registrations for the three units - Held that - The Concessional rate of duty can not be denied on the ground that one of the division out of three is engaged in the manufacture of POY and the application for separate registration cannot be rejected on the ground of revenue consideration so the factories at Jolwa have to be treated as separate. Facts in this are somewhat similar to that of VARDHMAN Spinning Mills case 1999 (8) TMI 916 - CEGAT, NEW DELHI in which Tribunal held that benefit of notification can not be denied, even if the factories are under the same management. - Stay granted.

Summary

Issues:
Interpretation of Notification No. 29/2004 - Concessional rate of duty eligibility based on factory facilities; Separate registration impact on factory classification.

Analysis:
1. The case involved a dispute regarding the interpretation of Notification No. 29/2004, which provides a concessional rate of duty for manufacturers lacking facilities for filament yarn production. The appellant, having three premises, sought separate registrations for each unit. However, the Revenue argued that two units within a common boundary wall should be treated as one factory due to shared labor, management, and processes.

2. The Tribunal considered previous judgments, including Dhampur Sugar Mills and J.K. Synthetics Pvt. Limited, where the number of registrations did not determine the number of factories if located within the same premises. The appellant cited Vardhman Spinning & General Mills and G.H. Singhvi & Ors., emphasizing that separate registration should not be denied, especially when units are functionally distinct, as in the present case.

3. Drawing parallels with previous decisions, the Tribunal found the appellant's case prima facie covered by precedents. Notably, in Dhampur Sugar Mills, the claim for one factory despite separate registrations was rejected, contrasting the current scenario where separate treatment of factories was deemed appropriate due to functional distinctions.

4. Consequently, the Tribunal waived the pre-deposit of duty, interest, and penalties, allowing a stay during the appeals' pendency. Acknowledging the significant revenue involved, both parties were permitted to file early hearing applications, ensuring a fair and timely resolution of the matter.