TMI Blog1999 (8) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. 2. The brief facts of the case are that the appellants are engaged in the manufacture of Cotton and Acrylic Yarns falling under Chapters 52 and 55 of the Central Excise Tariff Act. Prior to 15-5-95 the appellants paying duty of the dyed yarn at the stage at which it was cleared from their factory premises. Notification No. 35/95-C.E., dated 16-3-95 which provides NIL rate of duty to the yarn falling under Chapters 51, 52, 54 and 55 dyed, printed, bleached or mecerised on the condition if manufactured out of yarn falling within Chapters 51, 52, 54 or 55 of the Tariff on which the appropriate duty of excise has already been paid. This notification was further amended by Notification No. 84/95-C.E., dated 18-5-95 and proviso is added to the effect that exemption contained in the notification shall not apply to the clearances of yarn from a factory having facility (including plant and equipment) for producing single yarn. 3. On 19-4-95, the Board of Directorates of the appellant Company passing a resolution to divide and segregate dyeing unit from the spinning unit and on the same day the appellant wrote a letter to the jurisdictional Supdt. of Central Excise to inform that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separated as independent from one and other. 5. He submits that vide letter 15-5-95 application was made to State Government for registration of the Dyeing Unit as a separate factory. He submits that the Notification No. 35/95-C.E. was amended vide Notification No. 84/95-C.E., dated 18-5-95 whereby a proviso was added to the notification to the fact that the benefit of notification is not available to the factory having facilities for producing yarn. He submits that the appellant bifurcated their factory into two Units. One for Spinning and other for Dyeing of the yarn much before 18-5-95 on the date which the amending notification was issued. He submits that the Unit No. 2 that is Dyeing gets duty paid yarn from Unit No. 1 and also from market for dyeing purposes as both the factories were registered independently under the factories Act. Therefore, these are two independent factories. He, further submits that the two separate factories were found by the Revenue later on and Panchnama was drawn on 6-6-97 and in this Panchnama it was specifically mentioned that there is two units, one for Spinning and other for Dyeing. He submits as the appellant has decided to bifurcated the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or producing single yarn. Similar condition was also provided in the Notification No. 8/96-C.E., dated 23-7-96. The Commissioner of Central Excise held that appellant bifurcated their factory into two units only on papers and both the units are also under the direct control and supervision of the same person. Therefore, both the Units are really composite one and can be termed as a one factory. 9. The contention of the appellants that the Notification No. 35/95-C.E., dated 16-3-95 was amended by Notification No. 84/95-C.E., dated 18-5-95 and prior to this amendment on 18-5-95 the appellant have taken the necessary steps to segregated these two units and a resolution by the Board of Directorates was passed on 19-4-95 to this effect. The appellants also applied for separate registration of Unit No. 2 under the Factories Act vide letter dated 6-5-95 to the Directorate of Factories and in pursuance of this letter a separate licence was granted to Unit No. 2 by the State Government. The appellant vide letter dated 19-4-95 informed the Revenue Department that the dyeing unit that is Unit No. 2 has been separated and being function as a independent factory different and distinct from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Tribunal in the case of Unique Resin Industries v. Collector of Central Excise, reported in 1993 (68) E.L.T. 230 (Tribunal). In this case the Tribunal held that in case the units having common infrastructural facilities, sales network and pricing, financed and run by same family and products of all units having common code numbers are not independent units. The Revenue also relied upon the decision of the Bombay High Court in the case of Swadeshi Dyeing Bleaching Mills (P) Ltd. v. Union of India, reported in 1989 (41) E.L.T. 224 (Bom.). 12. The ratio of the above decisions relied upon by the Revenue are not applicable on the facts of the present case. In the case of Swadeshi Dyeing Bleaching Mills (P) Ltd. (Supra), the Collector of Central Excise gave a direction the assessee for immediately apply for the licence or amendment of existing licence under Rule 174 of the Central Excise Rules, 1944 as the assessee has bifurcated the unit into two units, one as Power operated Unit and other non-Power operated Unit. The Hon ble High Court held that the contention of the Collector that the two units are one and the same and the mere preparation of record to indicate that tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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