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TMI Blog1984 (8) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... ived from the Supdt., Central Excise, Yamunanagar, stating that the Asstt. Collector, Central Excise, Chandigarh, has held that both the units are to be treated as of the same manufacturer. The appellants sent a reply on 11-8-1977 urging that they should be given an opportunity to explain the matter in person. Thereafter, on 30-1-1978, the Assistant Collector, Chandigarh, held that M/s. Swastika Metal Works and M/s. Swastika Metal Works (Utensils Division) were two different firms with separate constitutions. He also held that the Utensils Division was entitled to exemption under Notification 176/77-C.E., dated 18-6-1977 if the total investment on plant and machinery was less than Rs. 10 lakhs. On 31-1-1978, the appellants wrote to say that the value of plant and machinery installed in the Utensils Division was less than Rs. 3 lakhs. Thereafter, the Collector issued show cause notices on 14-5-1982 and 20-5-1982, respectively, to the Metal Works and the Utensils Division, alleging that they were working jointly as one industrial unit and as one manufacturer. Reliance was placed on the application for Industrial Licence dated 25-3-1958, the application for import quota to M.M.T.C. da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the plan attached to the agreement. Shri Chandrasekharan pointed out that the Central Sales Tax authorities have recognised the Utensils Division as dealers for the purpose of Central Sales Tax. The Factory authorities at Chandigarh have registered the Utensils Division under the provisions of the Factories Act. He stated that the Collector has mainly relied on the application for licence under the Industrial Undertaking Rules, dated 25-3-1958 by Swastika Metal Works. According to him, this application was submitted long prior to the constitution of the subsequent partnership. The Swastika Metal Works (Utensils Division) have also applied for import quota on 23-5-1980, wherein they have referred to the Industrial Licence aforesaid. Shri Chandrasekharan argued that this statement would be irrelevant as regards the assessment in question. The Industrial Licence was granted to Swastika Metal Works, and since they have rented out a portion to the Utensils Division, the import quota application, referred to that Registration Number. He referred to the terms of the application, wherein Swastika Metal Works (Utensils Division) have undertaken to utilise the goods allocated onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In their application to the M.M.T.C., the Utensils Division have referred to the Metal Works as "our own factory". This application refers to the licence number in regard to the Swastika Metal Works. Again, in their application to the Government of India for Industrial Licence, they have submitted the value of machinery as Rs. 22,56,670.29. They have derived the benefit of the industrial licence. The partnership has apparently been constituted only with a view to avoid the payment of appropriate Excise duty. There was supersession of material facts. The show cause notice is valid. The raw materials have been applied for as if it was one unit. In 1983 (13) E.L.T. 1212 (Spencer & Company Limited, Madras v. Collector of Central Excise, Madras) the Tribunal has held that the term "Industrial Unit" would refer to the entire industrial complex embracing the manufacture of all the excisable goods. He, therefore, urged that the order of the Collector cannot be assailed. 4. In order to appreciate the respective contentions of the parties, it is necessary to advert to the actual wordings of Notification 176 of 1977 dated 18-6-1977. The Notification reads as follows :- "In exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t whether they constitute a single unit or two independent and distinct entities. 5. The JDR pointed out that on 23-5-1980 when an application for allotment of canalised items was made by M/s. Swastika Metal Works (Utensils Division) they have adverted to the licence obtained by Metal Works. Even in respect of the plant and machinery they have indicated the total value as Rs. 23,56,875.29. As against this we find that the appellants have produced the deed to partnership of the Utensils Division. The Utensils Division has been separately registered for the purpose of income-tax, salestax, registrar of firm, etc. A rental agreement between Metal Works and the Utensils Division has been produced. Most of the partners are identical in both the firms. But the question is whether the Utensils Division would be an Industrial Unit for the purpose of the notification. The Metal Works produces non-ferrous alloys and sheets. The Utensils Division manufacture utensils of copper alloys and stainless steel. The decision in 1984 (16) E.L.T. 30, the Bombay High Court had to consider the fact of Notification of 74/78. The words are almost identical. In that case the petitioners had a factory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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