TMI Blog2012 (12) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner based on the factors such as the product being manufactured in one premises being substantially used in the other premises for manufacture of final products, large number of raw materials being common, common electricity supply, common labour force, common administration/work management, common sales tax registration and assessment, common income tax assessment etc. In this case, the bulk of the yarn manufactured in the yarn unit is used in the fabric unit for manufacture of fabrics. It is also not denied that the electricity supply of the two units is common and the sales tax assessment and administration is also common. Beside this, we also find that the appellant have one single registration under the Factories Act and Pollution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Registration. On 1-4-1996, an application was made for single registration for both the units, which was accepted by the Jurisdictional Central Excise Authorities. With effect from 3-9-1996, the facility of Modvat credit was extended to textiles by Notification No. 29/96-C.E. (N.T.), dated 3-9-1996 issued under Rule 57A of Central Excise Rules, 1944. With effect from 23-7-1996, in terms of exemption Notification No. 22/96-C.E. issued under Section 5A(1) of Central Excise Act, the yarn cleared by a composite textile mill within the factory for manufacture fabrics became fully exempt from duty. Prior to 23-7-1996 this exemption was not available. Since, the appellant since April, 1996 had obtained common registration for both the units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of spun yarn from the yarn division to the fabric division during the period from 1-12-1996 to 1-6-1998 along with interest and imposition of penalty on the appellant company under Section 11AC; (b) recovery of allegedly wrongly taken Cenvat credit amounting to Rs. 6,64,04,235/- under Rule 57-I of Central Excise Rules, 1944 along with interest and also for imposition of penalty on the appellant company (weaving division) under Rule 57-I of Central Excise Rules, 1944 readwith Section 11AC of Central Excise Act, 1944; and (c) imposition of penalty under Rule 209A of Central Excise Rules, 1944 on Shri Vimal Arora, DGM (Accounts), Shri R.K. Sharma, Manager (Excise) and Shri L.S. Chandalia, the then Superintendenc, Shri Ram Kishan, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the manufacturing process of the yarn division and the fabric division is interlinked and not only this, the power source is also common, a common registration has been correctly granted, that in terms of the clarification issued in para 3.2 of C.B.E. C s. Manual and Supplementary Instructions, common registration can be granted to two units of the same assessee separated by public road, canal or railway line, if the product manufactured in one unit is substantially used for production of finished product in the other unit and the units have common electricity supply, common sales tax registration, common income tax assessment etc., that all these conditions for common registration are satisfied in the appellant s case, that in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Rules. 4. Shri R.K. Verma, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner in it. Shri Verma emphasised that the spinning unit and weaving units are two separate units and the same cannot be said to be interconnected and there was no justification for common registration. He further pleaded that since the common registration had been wrongly granted, the two units have to be treated as separate units and not as a composite mill and, hence, neither the spinning division was eligible for duty exemption under Notification No. 22/96-C.E., nor the fabric division was eligible for Modvat benefit under Notification No. 29/96-C.E. (N.T.), dated 3-9-1996. He, therefore, plead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for manufacture of final products, large number of raw materials being common, common electricity supply, common labour force, common administration/work management, common sales tax registration and assessment, common income tax assessment etc. In this case, the bulk of the yarn manufactured in the yarn unit is used in the fabric unit for manufacture of fabrics. It is also not denied that the electricity supply of the two units is common and the sales tax assessment and administration is also common. Beside this, we also find that the appellant have one single registration under the Factories Act and Pollution Control Act and that other statutory authorities like ESI, PF etc. In view of this, we hold that the two units of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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