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TMI Blog1993 (2) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... predecessor factory had a licence issued in the name of M/s. Polyspin Pvt. Ltd. and it covered four sheds, viz. A, B, C and D. The shed `C had been taken over on lease, by M/s. Polyspin Pvt. Ltd. from the respondents till September 1986. The products manufactured in shed `C by the respondents and M/s. Polyspin Pvt. Ltd. are the same. The plea of the respondent before the Collector (Appeals) was that they had taken over the unit which had been leased out to M/s. Polyspin and had started operating independently and for the purpose of exemption notification 175/86 they should be treated as an independent entity apart from M/s. Polyspin Pvt. Ltd. and clearances earlier made by M/s. Polyspin Pvt. Ltd. from their integrated factory comprising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pack Pvt. Ltd., M/s. Ganesh Agropack Pvt. Ltd. started manufacturing excisable goods from the said premises. The building from where M/s. Ganesh Agropack Pvt. Ltd., cleared excisable goods constituted a `factory from where more than one manufacturer had cleared excisable goods in the financial year 1986-87 in terms of Paras 2 and 3 of the Notification 175/86. In the financial year 1986-87, as the aggregate value of specified goods from such `factory in the financial year 1986-87 had exceeded Rs. 75 lakhs, in terms of para 2 of Notification No. 175/86 exemption thereunder to M/s. Ganesh Agropack Pvt. Ltd., for the financial year 1986-87 was not admissible. For the year 1987-88 as the aggregate value of all excisable goods from the same fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September, 1986 only the respondent ended the lease agreement and took over the shed `C and started independent manufacture of the said goods from October 1986 onwards. He has pleaded that inasmuch as the shed `C was a unit of the same factory until September 1986, for the purpose of benefit of notification the production that took place in the premises of units comprising of A, B, C and D should be the production relevant for the purpose of arriving at the aggregate for unit `C . He has pleaded that if the notification is interpreted as has been done by the learned Collector (Appeals) the mischief which is sought to be taken care of by Para 2 of the notification and the proviso therein could not be stopped and any manufacturer who has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d functioning as an independent entity with effect from 1-10-1986, partook of the character of the factory as it existed till September 1986 as in the shed `C of the factory till September 1986, the specified goods were being produced. Thus the shed `C in which the respondents started independent production in October 1986 had the character of a factory even before that date. In the present case the unit was started comprising of sheds A, B, C D and it is only later that the shed `C came to be started as a separate production unit and for which separate licence was issued by the Central Excise authorities. It was part of the factory which started production and in respect of which Central Excise authorities had issued the licence consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular financial year or when it started as a single entity in a particular financial year. The sub-units will have to be considered as continuation of the earlier bigger unit and any production that was there before division of the main unit into sub-units will have to be added upto the date when it was split up, to the production of the sub-units. To interpret the Notification in a way as interpreted by the learned lower appellate authority would mean that a bigger unit which is likely to exceed the overall aggregate value of the clearances may split up the units by giving on lease or otherwise into smaller units of production during the financial year and in this way by taking each of the sub-units as independent units with independent pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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