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TMI Blog2015 (7) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... public road, canal, or railway-line. When sugar mill and co-generation power plant are connected through overhead conveyer by which bagasse generated in the sugar mill is transferred to co-generation power plant where it is used in the boiler for generation of electricity and the electricity generated in the co-generation power plant is used in the sugar mill for its operation and only surplus electricity is sold to the state electricity board and when it is not disputed that administrations/work management of the sugar mill and co-generation power plant is common, the functioning of the sugar mill and its co-generation plant located across the public road has to be treated as interlinked and the two have to be treated as one factory. The Commissioner (Appeals) s findings in the impugned order on the functioning of the sugar mill and co-generation power plant that the two are totally incorrect. In our view, the reasons have been given by the Commissioner (Appeals) for upholding denial of common registration for sugar mill and co-generation power plants are absurd. - Decided in favour of assessee. - Appeal No. E/1025/2007, E/2912/2007, E/3073/2009, E/2857/2010, E/3592/2010, App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... semi finished goods used in the manufacture of final product of the sugar mill and therefore there is no interlinked process involved herein in this case and accordingly co-generation plant cannot be considered as an extended premises of sugar mill. The Commissioner (Appeals) while rejecting the request for common registration for sugar mill and co-generation power plant, also observed that the raw materials are not common of the two units, because in case of sugar unit the main raw material is sugar cane which has nothing to do with generation of power plant. Against this order of the Commissioner (Appeals), the appeal no.E/2912/07 has been filed. 1.4 Since the appellants request for common central excise registration for sugar mill and co-generation power plant was rejected, the department was of the view that the capital goods meant for co-generation power plant have not been used within the factory of manufacturer, and therefore the same would not be eligible for credit and similarly input service credit on the services of installation, erection and commissioning of plant and machinery of co-generation plant, and repair and maintenance of co-generation plant covered by rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed process when the products manufactured/produced in one premises are substantially used in other premises for manufacture of final products, (b) large number of raw materials being common and received/proposed to be received, commonly for both/ all the premises, (c) common electricity supply, (d) common labour/work force, (e) common administration/work management, (f) common sales tax registration and assessment, (g) common income tax assessment and (h) any other factor as may be indicative of inter-linkage of the manufacturing process, that the sugar mill and co-generation power plant connected through overhead conveyer by which bagasse is transferred to co-generation power plant where it is used in the boiler for generation of electricity constitute one factory as the electricity generated in the co-generation power plant is used in the factory only and the surplus electricity is sold to state electricity board, that the premises of sugar mill and its co-generation power plant are interlinked and as such the operation of the sugar mill is dependent upon the electricity generated by the co-generation power plant and the operation of co-generation power plant is dependent upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in or in relation to the manufacture of exempted final products while this is not so in the present case, and that in view of above , the impugned orders are not sustainable. 4. Shri M.S.Negi, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that as regard the question as to whether the sugar mill and co-generation power plant are to be treated as one factory in terms of Boards supplementary instruction issued under Rule 31 of Central Excise Rules, 2002 for issue of common central excise registration, the request for common registration of factory premise has been correctly rejected. He pleaded that since the common registration request has been denied to sugar mill and co-generation plant, the capital goods used in the co-generation power plant and input service covered by Rule 6(5) of Cenvat Credit Rules, 2004 used in respect of power plant would not admissible the cenvat credit. He, therefore, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions made by both sides and perused the records. 6. The main dispute in this group of appeals is as to whether common reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant located across the public road has to be treated as interlinked and the two have to be treated as one factory. The Commissioner (Appeals)s findings in the impugned order on the functioning of the sugar mill and co-generation power plant that the two are totally incorrect. In our view, the reasons have been given by the Commissioner (Appeals) for upholding denial of common registration for sugar mill and co-generation power plants are absurd. Therefore, we have no hesitation to set aside the Order-in-Appeal NO.157/2007 dt.31.7.2007 passed by the Commissioner (Appeals) and similar findings given by the Commissioner in the Order-in-Original No.09-14/2007 dt.23.2.2007. Since in our view, the sugar mills and co-generation power plant even though separated by a public road have to be treated as one factory as their operations are interlinked and common registration has been wrongly denied to them, the appellant would be eligible to credit on capital goods used in the co-generation power plant. Similarly, they are also eligible for credit of service tax paid on installation, erection and commissioning of machine, plant, repair and maintenance of plant, etc. which have been used in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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