9911796707
TMI Blog1999 (11) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... was confirmed against the appellants on different counts covered by the show cause notices. 2. The common issue raised in all the appeals is whether the appellants are eligible for exemption provided under Notification No. 35/95-C.E., dated 16-3-1995 (upto 23-7-1996) and thereafter under Notification No. 8/96-C.E., dated 23-7-1996 and superceded by Notification No. 4/97, dated 1-3-1997. 3. The appellants are engaged in the manufacture of cotton and acrylic yarn falling under Chapters 52 and 55 of the Schedule to the Central Excise Tariff Act, 1985. The common allegation against the appellant is that prior to 15-5-1995, they were paying the Central Excise duty on the goods at the stage at which they were cleared by them. After co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pendent of each other in the sense that whereas Unit No. 1 manufactured yarn, Unit No. 2 undertook only dyeing and bleaching of the yarn. The matter was adjudicated by the Commissioner after hearing the representations of the appellants reiterating their submissions made in the replies to the show cause notices. 5. The Commissioner adopted the reasoning followed by his predecessor in two earlier orders-in-original dated 14-9-1997 and 29-9-1999 and passed the impugned order. 6. We have heard Shri R. Santhanam, ld. Advocate for the appellants and Shri R.S. Sangia, ld. JDR for the respondent Collector. 7. Ld. Counsel referred to the Final Order Nos. 751-756/99-D, dated 31-8-1999 passed by this Tribunal in their own cases in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. A lay out plan in respect of the two units had also been submitted to the Officer concerned on 24-9-1995. Further appellants had also applied on 6-5-1995 to the Directorate of Factories for obtaining separate registration under the Factories Act in respect of the dyeing unit. Appellants had again written to the Department for approval of the lay out plan of the two units. A similar request was also made on 18-10-1995. Instead of granting permission to the lay out plan, the Department had chosen to issue a show cause notice for denying the duty exemption available to the appellants under Notification No. 35/95. Ld. Counsel emphasised the fact that the appellant company had decided to bifurcate the factory into two units even before the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants were producing yarn falling under Chapters 51, 52, 54 and 55 in their factory, and they were also dyeing such yarn in the same factory before 9-4-1995. Appellants had bifurcated their factory into two units only with a view to evade payment of duty by purporting to show that the factory manufacturing yarn was different from the factory engaged in the dyeing of the same yarn. The purported bifurcation was only for the sake of record and in paper. Further, definition of 'factory' under the Factories Act served an entirely different purpose and was intended to be in furtherance of the objects of that Act. For purposes of Central Excise Law, 'factory' as defined in Section 2(e) of the Central Excise Act, 1944, alone was relevant. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner to the effect that in terms of Section 2(e) of Central Excise Act, a factory comes into existence only on its obtaining registration under the Central Excise Rules. 10. We have considered the submissions and have perused the case law cited before us. We find that the dispute lies within narrow compass. In terms of Notification No. 84/95 a proviso was added to Notification No. 35/95 by which the exemption given to yarn falling under Chapters 51, 52, 54 or 55 would not be available to yarn cleared from a factory having facility (including plant and equipment) for producing single yarn. The appellants' case is that the clearance of yarn from their dyeing unit, being an independent unit and different from the unit producing sing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Rules relating to Registration of manufacturers of excisable goods, that the proper officer has to grant a registration certificate under Rule 174 within 30 days of receipt of application for such registration. Where such registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted. The Department has not disputed the fact that the appellants had applied for registration. Further, after their decision to bifurcate the composite unit and the appellants had submitted the lay out plan for the purpose of obtaining registration and had also submitted clarifications on 11-10-1995 and 12-10-1995 apart from making further request on 18-10-1995. We find that in terms of Rule 174 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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