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TMI Blog2014 (4) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... L and the OPAI is the same. The jurisdictional Superintendent of Central Excise, after verification issued central excise registration no.21/SGP/MK/CH/48, 47 and 28/94 to OPAI. Thus factory in the name of OPAI had been set up in same compound in which the old unit, MPL was located. The unit of OPAI started production in the year 1994. 1.2 Both the units, as mentioned above, MPL and OPAI were manufacturing the same final products and both of them were availing of exemption under notification no.47/97-CE dated 1.3.97 and its successor notifications no.5/98-CE dated 2.6.98, no.6/2000-CE dated 1.3.2000 and no.3/2001-CE dated 1.3.2001 respectively which exempted paper and paper board and articles made thereof in a factory starting from the stage of pulp, which contains not less than 75% by weight of pulp other than bamboo, hardwoods, soft wood, reeds (other than sarkanda) or rags. This exemption was available in respect of first clearance in a financial year upto a specified limit as mentioned in the notification. 1.3 The unit set up with the name OPAI in 1994 was renamed as M/s. Mukerian Papers Unit No.II by a decision taken in the board meeting of MPL held on 30.11.1994. Thus, in No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esides this, the show cause notice also sought imposition of penalty on Shri H.R. Darwesh, Executive Director and Shri Ramesh Jain, Manager Excise under Rule 209A of the Central Excise Rules, 1994/Rule 26 of the Central Excise Rules, 2001. 1.6. Thereafter another show cause notice dated 1.7.2003 was issued on the same ground for demand of differential duty amounting to Rs.1,30,80,291/- in respect of clearances of paper and paper board during the period from 1.4.2002 to 15.1.2003 along with interest thereon under Section 11 AB. This show cause notice also sought imposition of penalty on the appellant company under Rule 25 of the Central Excise Rules, 2002 and on Shri H.R. Darwesh, Executive Director and Shri Ramesh Jain, Manager Excise under Rule 26 of the Central Excise Rules, 2002. This show cause notice also sought cancellation of the separate registration given to Mukerian Papers Unit No.II. 1.7 Both the show cause notices were adjudicated by the Commissioner of Central Excise Jalandhar by a common order-in-original no.87/88/CE/JAL/04 dated 30.06.2004 by which the Commissioner upheld the issue of separate registration certificate to the Mukerian Paper Unit II and accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne plant, common primary clarifier, common lime mud washer and common liquid clarifier and common effluent treatment plant for both the units, that there is only one electricity connection, that production of both the units is inter-linked and one unit cannot function without the other unit, that facilities for the workers like canteen, cycle stand, scooter stand, car parking, ESI dispensary is common, that there is common mechanical workshop and electrical workshop, that sales organization of both the units is common, that the workers of both the units were common and similarly, the administrative control on personnel and payment of wages was common, that in the application dated 8.7.95 made to Regional Provident Fund Commissioner, the new unit of OPAI was not presented as a separate factory but the Respondent had stated that they may be issued separate code number for the new unit for administrative convenience, as the unit has been started by the same management as that of MPL and accordingly, a separate code number had been allotted to OPAI, that the two units cannot be treated as separate 'factory' in terms of the definition of this term as given in Section 2(e) of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand as made in the show cause notices and imposition of penalty on the Respondent. 4. Shri K.K. Anand, Advocate, ld. Counsel for the Respondent, defended the impugned order by reiterating the findings of the Commissioner and pleaded that the exemption notification no.4/97-CE dated 1.3.97 and its successor notifications is available factory-wise and not assesseewise, that if a person has more than one factory manufacturing paper and paper board and each factory satisfies the conditions for exemption no.4/97-CE its successor notifications, each unit would be separately eligible for exemption, that in this regard, he relies upon the judgement of the Tribunal in the case of Rollatainers Ltd. Vs. CCE, Delhi-III reported 2002 (150) ELT 383 (Tribunal-Delhi), which has been upheld by the Apex Court vide judgement reported in 2004 (170) ELT 257 (SC), that the two units of the respondent have to be treated as separate factories, that separate registration to unit II has been granted by the jurisdictional central excise officers in the year 1994 after due verification, that just because there is common electricity connection and water storage and some common manufacturing facilities, it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p contains not less than 75% by weight of pulp made from materials other than bamboo, hardwoods, soft wood, reeds (other than Sarkanda) or rags. There is no dispute that the conditions regarding paper and paper board or articles made therefrom having been made from pulp containing not less than 75% by weight of the pulp made from materials other than bamboo, hardwoods, soft wood, reeds (other than Sarkanda or rags) are satisfied and the availment of exemption by each unit was within the quantity limit specified in the exemption notification. The only point of dispute is as to whether each unit could separately avail the exemption under these notifications even though the same were owned by the same company, M/s. Mukerian Papers Ltd. and linked with this dispute is the dispute as to whether MPL Unit I and MPL Unit II both owned by the Respondent could be treated as separate factories. 6. Notification no.4/97-CE and its successor notification exempted paper and paper board or articles made therefrom manufactured starting from the stage of pulp in a factory subject to condition that such pulp contains not less than 75% by way of pulp made from materials other than bamboo, hardwoods, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f chlorine and Calcium hypochloride and a number of other chemicals processes are common. In terms of the Board's supplementary instructions issued under Central Excise Rules 1944/Central Excise Rules, 2001 separate central excise registration is required in respect of separate premises except when two or more premises are actually the part of the same factory where the processes are interlinked and in the latter cases a common registration is to be given even if the two premises are separated by a public road, canal or railway line and that for this purpose, manufacturing processes would be treated as inter linked if - (a) A product manufactured produced in a premises is substantially used in other unit for manufacture of another final product; (b) a large number of raw materials are common and received commonly for both the premises, (c) There is common electric connection; (d) There is common labour force/work force; (e) There is common administration/works management; and (f) There is common sales tax, registration assessment and income tax assessment. In this case, the two units are not divided by any public road, canal or railway line and there is no boundary wall sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants); that it was one single factory consisting of separate units; that sugar and molasses came under one of the units, paper and paper board came in the other unit and that chemicals came in the third unit. In the circumstances, the assessee-respondent was entitled to the benefit of exemption notification. It is not even alleged in the show cause notice that there are three factories as submitted on behalf of the Department. Thus, in terms of the above judgement of the Tribunal affirmed by the Apex Court, facilities for manufacture of different excisable goods in the same premises are to be treated as single factory, even if separate central excise registrations have been issued in respect of different final products. 7. The Tribunal in the case of Balrampur Chini Mills Ltd. reported in 2002 (149) ELT 286 (Tribunal-Delhi) also held that two divisions of assessee manufacturing sugar and chemicals have to be granted a common registration under central excise rules even if the same are separated by a road as their processes are inter-linked. Same view was taken by the Tribunal in the case of Escorts Limited reported in 2011 (273) ELT 415 (Tribunal-Delhi) wherein relying upon the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts or fraud, contravention of provisions of Central Excise Act, 1944 or of the Rules made thereunder with intent to evade the payment of duty is not sustainable, neither penalty under Section 11 AC of the Central Excise Act 1944 or under Rule 173 Q (1) (d) would be sustainable nor the interest on duty under Section 11 AB would be attracted for the period prior to 11.5.2001 as during the period prior to 11.5.2001, demand of interest under Section 11AB on the duty short paid, not paid or erroneously refunded was linked with such non-payment, short payment or erroneous refund having taken place due to wilful mis-statement, suppression of facts or fraud etc. on the part of the assessee. The interest on sort paid duty would be chargeable under Section 11 AB only in respect of clearances w.e.f. 11.5.2001. 11. In view of the above discussion, while holding that the Unit No.I and II of the Respondent company are to be treated as one factory and not separate factories and for this reason, they would not be separately eligible for the exemption under Notification no.4/97and its successor notification, and that for the purpose of these exemptions, the clearances from the two units are t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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