9911796707
TMI Blog1988 (4) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... dded to it. In 1970 the company was granted an industrial licence for manufacture of phenyl, acetic acid and related chemicals. The chemical plant for this purpose was also set up in adjoining premises in the same organisation and unit namely Daurala Sugar Works. For manufacture of Phenyl and related acid the petitioner needed toluene. Use of this could be permitted on payment of duty at concessional rate. Consequently an application was made by company to Assistant Collector, Central Excise, Meerut on 28-12-1970 under Rule 192 of Central Excise Rules by General Manager of Daurala Sugar Works. After Collector was satisfied that applicant was a person to whom said licence could be granted without danger of revenue and that premises were suitable for purpose of storing goods for which concession was claimed, licence in Form AL6 was issued in name of Daurala Sugar Works on 18th May, 1971. In July, 1972 an administrative decision is stated to have been taken by company that unit known as Daurala Sugar Works should be administratively divided into two. And sugar cube section, distillery, including potable plant and chemical plant came to be known as Daurala, Chemical Industries and Suga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urala Chemical Industries with effect from 1st July, 1971. Since transfer was without permission the transferee should have obtained fresh licence under Rule 178(3) as it was separate entity and licence in favour of M/s. Daurala Sugar Works should not have been transferred in favour of M/s. Daurala Chemical Industries. To these notices petitioner filed reply and reiterated its claim that but for change of name for administrative convenience, there was no change nor there was any transfer of one unit to another. It was also pointed out that since transfer was effected in 1972 non-levy could relate to 1st July, 1972 to 28th February, 1975. After receipts of notice Superintendent appears to have withdrawn earlier notices as period mentioned in it was not accurate and issued fresh notices repeating whatever was said in the earlier notices and directing M/s. Daurala Sugar Works to show cause as to why non-levy may not be realised from it. The petitioner once again filed reply to show cause notice, but Assistant Collector by its order dated 13th December, 1977 rejected the claim of petitioner and held that units of petitioner engaged in transaction of different commodity at different pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y material on record the finding that M/s. Daurala Sugar Works transferred its unit manufacturing chemicals to a different entity namely Daurala Chemical Industries was manifestly erroneous in law. Learned Counsel submitted that in fact both M/s. Daurala Sugar Works and M/s. Daurala Chemical Industries were owned by same company the petitioner and licence having been granted in favour of petitioners it was not necessary to get fresh licence when only the nomenclature of the unit was changed. It was also submitted that once it was found that Toluene supplied by Excise department was used in accordance with rules, the finding recorded by various authorities about contravention was un-founded and baseless. Learned Counsel urged that in any case opposite parties committed error of law in not recording any finding on applicability of Rule 10 and Rule 10A(2) although it was specifically raised and noticed by each of them. It was also urged that in case department was of opinion that M/s. Daurala Chemical Industries was separate entity then notices issued to M/s. Daurala Sugar Works for non-levy were invalid. On the other hand learned Standing Counsel for Union of India urged that finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establish that there was in fact transfer of one unit to another. For transfer, change of ownership was necessary. It can be illustrated by giving example. For instance A owner of a company with particular trade name transfers it in favour of B, but for purposes of business etc. trade name of transferring unit is maintained. Can it be said that although ownership changed but since name continued to be same, therefore, there was no transfer. Putting it in reverse order if name is changed but ownership continue, can it be said that there was transfer or conveying of ownership. Mere change of entity may not ipso facto result in transfer of ownership unless there is a provision to the contrary in the Act or Rules. Change of name, therefore, or even creation of entity with name of Daurala Chemical Industries could not lead to inference that unit manufacturing chemicals under name of Daurala Sugar Works transferred it to Daurala Chemical Industries Ltd. The finding, therefore, that unit was transferred cannot be upheld. 6. Even the finding that Toluene was not used in the 'manner stated in the application' appears to be erroneous. Copy of application is on record. It mentions the place ..... X X X X Extracts X X X X X X X X Extracts X X X X
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