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TMI Blog2011 (7) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... hri B.K.Singh, JCDR Shri R.K.Verma, JDR PER: M.VEERAIYAN 1.1 Appeals No.E/940-942/08 arise out of order of the Commissioner No03/CE/P.K.J/Adjn/2008 dt.7.4.08 and the same have been filed by three different units of same company, namely, Escorts Limited. The dispute relates to the period 2005 to 31.3.2007. 1.2 Appeals No. 2666-2668/08 are against the order in original No.35-36/CE/P.K.J/Adjn/2008 dated 30.9.08 also filed by three units of the above said company. The dispute relates to the period April, 07 to 7th April, 08. 1.3 As the facts and legal issues involved are identical and appellants are the same company, these appeals are disposed of by this common order. 2. Heard both sides extensively. 3.1 Appellant has one production facility known as unit No.1 at 18/4, Mathura Road, Faridabad manufacturing tractor parts, another known as Unit II situated at plot no.2, sector 13, Faridabad manufacturing tractors and another known as Unit III situated at plot no.3, sector 13, Faridabad manufacturing tractors. Unit No.II was engaged in the manufacture of Farmtrac Brands of Tractor whereas Unit No.III was engaged in the manufacture of Escorts Powertract Brand T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) and later under Notification No. 6/06-CE 1.3.06 (S.No.92) were not available for the clearances of goods not used within the same factory of production. The demands have been issued invoking extended period of limitation. 3.7 The Commissioner vide order dated 7.4.08 for the following orders: ORDER (i) I hold that all the three Units of M/s.Escorts Limited (AMG) situated at 18/4, Mathura Road, Faridabad, Plot No.2, Sector 13, Faridabad Plot No.3, Sector 13, Faridabad are not part of a single factory, but each one of them is an independent factory as defined under Section 2(e) of the Central Excise Act, 1944; (ii) I hold that parts and accessories of Tractors cleared from Unit I at 18/4, Mathura Road, Faridabad to Unit II III at Plot No.2 3 respectively, Sector 13, Faridabad are chargeable to appropriate Central Excise duty for he period 9.7.2004 onwards and benefit of exemption Notification No.6/2002-CE dated 01.03.2002, as amended and Notification No.6/2006-CE dated 1.3.2006 is not available to the noticee. (iii) In confirm a demand of Rs.10,10,61,154/- from M/s.Escorts Limited, Unit I, 18/4, Mathura Road, Faridabad, Rs.5,29,989/- from M/s.Escorts Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II to Unit III raised vide SCN dated 9.7.2008 under Section 11A of Central Excise Act, 1944. Appropriate interest under Section 11AB of the Central Excise Act, 1944 shall also be payable. (iii) I order that the notice are entitled to CENVAT credit attributable to inputs involved in the manufacture of parts cleared without payment of duty form Unit I to Unit II III and from Unit II to Unit III. However, the admissibility of quantum of CENVAT credit is subject to verification of the amount of CENVAT credit by jurisdictional Range Superintendent for the respective period. 4.1 Learned Advocate submits that the common registration given to unit II III vide order dated 3rd March, 2003 and the common registration given vide order dated 6.9.04 including unit I are lawful. The same have been granted after taking into account various factors such as interlinked process, movement of goods manufactured from one premises to other premises, common administration, common sales tax registration, common income tax assessment as contemplated in para 3.2 of CBEC manual of supplementary instructions. These approvals have been granted after conducting verification of the contents of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to each other; M/s.ECEL is situated in between the said units; and that the two units are not separated by any common road or canal or railway line but there are residential houses in between them. Under these circumstances these two units do not qualify for common registration. Further, the manufacturing activity are not interlinked since the unit II III manufacture identical goods namely, tractors of different brand names and goods manufactured in one is not input for another. He further submits that unit I being at a considerable distance of about 1.5 km from the other two units, the common registration given on 6.9.04 for all three units is erroneous. 5.3 As the Commissioner has power to grant common registration, he has also power to revoke the same on coming to know that the registration was wrongly given and accordingly show cause notice was issued and the common registration stands revoked. In the facts and circumstances of the case, he submits that revocation retrospectively of the common registration and modification of the same by restoring individual registrations is valid and the consequences are to follow. 5.4 The show cause notices not only proposed modif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered submissions from both sides and perused the records. The following issues arise for consideration. (a) Whether the appellants were entitled to common registration in terms of notification no 36/01-CE (NT) dt.26.6.01? (b) In case they were not eligible for common registration whether the Commissioner was right in revoking retrospectively the common registration granted to them and modifying the registration as separate registrations for each of the three units? (c) Whether the three different units be treated as a single factory eligible for exemption for goods manufactured in one unit and used in another unit treating the same as used in the factory of production on the ground that are under common registration? (d) If it was held that three units are independent factories, then whether the demand of duty denying the exemption is beyond the scope of show cause notices? 7.1 The registration of central excise assessee is in terms Section 6 of the Central Excise Act read with Rule 9 of the Central Excise Rules, 2002. Rule 9 of the Central Excise Rules read as under: Rule 9. Registration (1) Every person, who produces, manufacturers, carries on trade, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain cases registration is totally exempted and in certain cases common registration is provided for. The Board has given the above guidelines as to circumstances in which two premises can be treated as part of the same factory. They have prescribed seven different specific indicators and another indicator which is residual in nature. It has also been clarified that the list of 8 are not exhaustive indicators and that it is not as if that every indicator should be necessarily satisfied. 7.4 The facility of common registration can thus be extended at the discretion of the Commissioner taking into account the relevant factors. It is settled law that the authority which has power to grant certain permission/facility has the power to withdraw the same. However, withdrawing the said facility retrospectively, in the given facts and when the permission was granted based on applications by the appellants and after due verification of the details is not appropriate. It is not a case of the department that the appellants have given any false particulars and obtained the facility. 8.1 The definition of the factory as given in the Central Excise Act, reads as under: 2(e) factory mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court in the case of Lohia Sheet Products vs. CC, New Delhi-2008 (224) ELT (SC). 10. In view of the above, the following emerges: (a) The Commissioner has power to revoke the common registration granted, in case he found the guidelines issued by the Board do not permit common registration. However, the Commissioner was not justified in withdrawing the facility of common registration retrospectively. (b) The proposal for denial of the exemption in the show cause notices was on the ground that the common registration granted was not correct and the same was not in conformity with the guidelines of the Board. Therefore, when it is held that the facility of common registration cannot be denied retrospectively, the demand of duty on inter unit transfer on other grounds will be clearly going beyond the scope of the show cause notices. On this ground, the demand of duty for the period prior to 7.4.08 cannot be sustained. (c) The Board s guidelines clearly envisages registration of different premises of the same factory. The common registration therefore makes the three different premises as belong to the same factory. Further, the term used in the factory of production sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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