1969 (12) TMI 43 - HC - Central Excise

Summary

Issues:
1. Interpretation of Rule 175 (3) of the Central Excise Rules regarding obtaining separate licenses for distinct factories under the same company.
2. Application of the proviso to Rule 175 (3) in cases of unmanufactured products.
3. Determination of whether separate licenses are required for factories situated in the same town but with distinct operations.

Analysis:
The judgment deals with the interpretation of Rule 175 (3) of the Central Excise Rules concerning the issuance of separate licenses for distinct factories owned by the same company. The case involved a company that operated two separate factories in the same town but with distinct operations. The company had historically obtained separate licenses for each factory. However, in 1967-68, the Assistant Collector expressed the intention to grant only one license for both factories, prompting the company to seek legal recourse. The company argued that the factories were distinct and separate entities, justifying the need for separate licenses. The court noted that while the factories belonged to the same company, they were not at the same business location, and each factory had its own operations. The court upheld the company's claim, emphasizing that Rule 175 (3) allows for the issuance of separate licenses when a person or company has more than one place of business. The court rejected the argument that the factories should be treated as one due to their proximity or common features, emphasizing the right of a person to apply for separate licenses for each place of business.

The judgment also addressed the application of the proviso to Rule 175 (3) concerning cases of unmanufactured products. The court clarified that the proviso specifically pertained to unmanufactured products alone and did not restrict the right to obtain separate licenses for manufactured products. The court highlighted that Rule 175 (3) grants individuals the right to apply for separate licenses for each place of business, without limitations based on the type of products manufactured or the proximity of the business locations. Therefore, the court dismissed the argument that the proviso restricted the company's ability to obtain separate licenses for its distinct factories.

In conclusion, the court affirmed the company's right to obtain separate licenses for its two distinct factories, emphasizing the provisions of Rule 175 (3) that allow for such licensing arrangements. The judgment clarified that the location or proximity of factories in the same town does not negate the company's entitlement to separate licenses for each place of business. As a result, the court dismissed the appeal brought by the Assistant Collector, Central Excise, upholding the decision to grant separate licenses to the company for its two factories.