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TMI Blog2017 (2) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be regarded as constituting the same factory for the purpose of Notification No. 253/82 (earlier Notification No. 80/76) by the virtue of the facts that one unit is power operated and other is non power operated unit. The adjudicating authority in the impugned order held as under: ORDER "I therefore pass the following order: For the above reasons I am of the firm opinion that the various non power operated units and the corresponding power operated units mentioned against each serial number constitute a single manufacturing unit i.e. the same factory for the purpose of C. Ex and Salt Act, 1944. The concerned units should therefore immediately apply for a licence/amendment of the licence as the case may be, under Rule 174, in respect of the entire premises of the power operated unit and the corresponding non power operated unit mentioned against each serial number of the order. If any of the parties at S.No.1 to 16 fails to do so within 10 days of the receipt of this order, the licenses if any, will stand cancelled and action will be taken for manufacture of goods without a valid licence. The demands under reference for the past period are set aside for the reasons given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso to Notification No. 80/76-C.E. added by Notification No. 292/79-C.E. This cannot be covered by proviso to Section 11A. (b) The legislative history surrounding the amendments made on 24-11-1979 will show that intentional evasion of duty cannot be attributed to the Assessees/Respondents. On 14-5-1979, the Central Excise & Salt and Additional Duties of Excise (Amendment) Bill, 1979 was introduced in Parliament proposing the insertion of sub-clause (v) in Section 2(f) of the Act so as to include bleaching, mercerising, dyeing, printing etc. within the meaning of the term "manufacture" under Section 2(f) in relation to goods comprised in Item No. 19I. The Statement of Objects and Reasons appended to the Bill clearly provided that the amendment was introduced to overcome the difficulty that has arisen as a result of the judgment of the Hon'ble Gujarat High Court in the case of Real Honest Textiles v. Union of India vide which the Hon'ble Court held that the terms "Fabric" as used in the Tariff description "Cotton Fabric" under Tariff Item No. 19 would refer to only "grey cloth" and that processing of the grey cloth either by bleaching, dyeing or printing does not amount to "manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of dutiable processes do not escape payment at any stage. The legislative intention is that duty on dutiable processes like bleaching, dyeing etc. done with the aid of power would be paid by the processor i.e. integrated/composite mill at the final stage, i.e. calendering. This alone was the object sought to be achieved by adding the above proviso to Notification No. 80/76-C.E. by Notification No. 292/79-C.E., dated 24-11-1979. Notification No. 80/76-C.E. as amended by Notification No. 292/79-C.E. continued to be in operation till 4-11-1982, on which date, it was superseded by similar Notification No. 253/82-C.E. Notification No. 137/77-C.E. granting total exemption from BED and AED to Cotton Fabrics processed without aid of power or steam was maintained undisturbed in Notification No. 130/82-C.E. However, instead of achieving the stated objective of the legislature, the proviso added created a very anomalous situation. An integrated/composite mill carrying on the process of bleaching, dyeing or printing (without aid of power) accompanied with calendering within the same factory, was not paying processing stage duty in view of Notification No. 137/77 (Processing without aid o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff Item No. 19I(b) also stood amended as under, vide Act 6 of 1980 w.e.f. 12-2-1980 :- Cotton Fabrics - "19. I. Cotton fabrics, other than (i) embroidery in the piece, in strips or in motifs and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials and (iii) fabrics covered partially or fully with textile flocks or with preparations containing textile flocks - (a) cotton fabrics, not subjected to any process. (b) cotton fabrics, subjected to the process of bleaching, mercerising, dyeing, printing, waterproofing, rubberizing, shrink-proofing, organdie processing or any other process or any two or more of these processes." Thus, after the amendments made by Act 6 of 1980, each of the processes like bleaching, mercerising, dyeing, printing etc. became dutiable. Vide another Budgetary Notification No. 137/77-C.E. dated 18-6-1977, Cotton Fabrics falling under T.I. No. 19 when processed without aid of power or steam, were wholly exempted from payment of BED and AED. The relevant Notes on Budget changes (1977-78) read as under : "Item 19 - Cotton fabrics - (1) ....... (2) ....... (3) Unprocessed cotto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) with regard to "calendaring" equally apply to the process of "stentering" carried on by the Respondents on Cotton Fabrics and the same would also not amount to "manufacture" as envisaged under Section 2(f) of the Act. (d) Squeezing of excess water from the fabrics also does not amount to "manufacture" in view of the principle laid down by the Larger Bench decision in Adreena Industries v. CCE, Chandigarh, 1987 (28) E.L.T. 364 (Tribunal). (e) Consequently, even if all the above units i.e. SDBF, SDC and SRP are one and constitute a single factory and are also treated as one manufacturer, the process of bleaching and dyeing undisputedly carried on without aid of power or steam, would be exempt under Notification No. 137/77-C.E. upto 19-4-1982 and thereafter, under Notification No. 130/82-C.E. The process of "calendaring", "stentering" & "squeezing of excess water" do not amount to "manufacture" as contemplated under Section 2(f) of the Act. Consequently, there would be no liability to duty. In Natwar Textile Processors Pvt. Ltd. v. CCE, Surat, 2000 (120) E.L.T. 654 (Tribunal), the CEGAT dealing with an identical situation concluded that no duty would be payable. We therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be rendered nugatory. All the units under reference are separate factories and are not the precincts nor the part of the same premises. (b) The various factors such as common management common administration, common sharing of water, job work transactions amongst them, close relationship amongst the partners etc. including the so-called operational unity relied upon by the Collector are entirely irrelevant for the determination of the issue involved in the present case. These factors may be relevant to find out whether manufacturer is the same or not. In view of the above the facts referred to by the Collector are not relevant to decide as to whether the said units constitute one single factory or are different factories. The benefit of Notification No. 80/76-C.E. as amended and/or 253/82-C.E. cannot therefore be denied and we accordingly extend the same to the assessees." Since, the entire issue has been settled in the above cited decision of the Tribunal, which was in various appeals filed against a common order which is impugned in the present appeals also, the Revenue's appeal does not survive. Therefore applying the decision in Swastik Dyeing & Bleaching Factory (supra). T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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