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TMI Blog1998 (5) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... Yarn falling under Chapter 55 of the Central Excise Tariff Act, 1985. They manufactured single spun yarn and cleared the same to independent buyers as well as to another unit of the respondents on payment of duty. It therefore appeared that the Respondents is having the facility for manufacture of doubled yarn falling under sub-heading 5506.21 and 5510.60 of the Central Excise Tariff Act, 1985. They were availing exemption under Notification No. 35/95 for the manufacture of double yarn in their factory after paying duty on single yarn used for the manufacture of double yarn. The Notification was amended by Notification 84/95-CE and a proviso was added to the effect that exemption contained in Serial No. 1 relating to double yarn shall not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, the two unit are part of an integrated factory and the very purpose for the proviso which was added by the amending Notification No. 35/95, according to the Ld. JDR was to deny exemption to such an integrated unit. 3. Shri V. Sridharan the Ld. Counsel for the Respondents contended that the proviso to the Notification makes it clear that the exemption under Notification No. 35/95 would not apply to clearances of yarn from a factory having facilities, including plant and equipment for producing single yarn. The emphasis in the proviso is on a factory, and if the factory premises where the single yarn is manufactured is distinct from the factory premises where the double yarn is produced, the Ld. Counsel submitted then prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. He has given a finding that according to Rule 174 relating to issue of registration certificate for manufacture of excisable goods, if there are more than one premises the manufacturer has to obtain separate registration. Accordingly the Respondents have obtained two registration certificates for separate premises and they had also cleared single yarn from one of the registered premises on payment of duty to the other for manufacturing double yarn. The Commissioner has further observed that the exemption under the Notification No. 35/95 is given to the product double yarn manufactured by a factory irrespective of the fact whether any there plant is possessed or not by the same manufacturer. The Commissioner has also found that he prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents will be hit by that proviso; but the proviso being with reference to a factory, having regard to the factual findings, of two authorities that the two units of the Respondents are two factories, the exemption cannot be denied to such separately registered premises which function as two different factories. In the context it is also relevant to note that the activities carried out in the two units are not so integrated that one cannot function without the other. When manufacture of single yarn is completed, the single yarn itself is a finished excisable product, which is in fact cleared on payment of duty by one unit of the respondents to their other unit. In such a context, the case law cited by the Ld. Counsel in the case of Puro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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