1. This is a Revision Application against the Order-in-appeal No.440/81, dated 8-6-1981 passed by the Appellate Collector of Central Excise, Madras, which has been transferred to the Tribunal for disposal as if it were an appeal filed therefore it.
The appellants are manufacturing goods falling under Tariff Item 68 in their House Furnishing Factory and have claimed exemption from payment of duty on first clearances upto the value of Rs. fifteen lakhs as per Notification No. 89/79, dated 1-3-1979. They have submitted a statement of the total value of capital investment made from time to time on Plant and Machinery in the Housing Furnishing Unit showing the capital investment as Rs. 2,40,501.95. As they were not permitted to avail the exemption under the Notification mentioned above, they were paying duty under protest. Meanwhile they were periodically sending their claims for refund in time. The Lower Authority in the impugned order has held the view that the term 'industrial unit' occurring in the proviso to Notification No. 89/79, dated 1-3-1979 will refer to the entire industrial complex of the appellants embracing the manufacture of all the excisable goods viz., Aerated Waters, P or P Medicines, Steel Furniture as also the goods produced in the House Furnishing Unit and as such came to the conclusion that the capital investment of Plant and Machinery of the entire complex will exceed ten lakhs and the appellants are, therefore, not entitled to the exemption under the aforesaid Notification. Accordingly, he rejected the eight claims for refund.
3. Aggrieved by the said order of the Lower Authority, the appellants have come forward with the pleas that Notification No. 89/79, dated 1-3-1979 and superseding Notification No. 105/80, dated 19-6-1980, were applicable to them, that the decision of the Assistant Collector in interpreting the term 'industrial unit' against the language used in the Notification, that the Assistant Collector has not taken into consideration the opinion 6f the Ministry of Finance in their letter F.No. 93/33/77. CX. 3, dated 8-2-78 issued in respect of Notification No.39/73, dated 1-3-73 stating that the computation of value of Plant and Machinery should be with reference to the units for the Specified Goods and that inclusion of value of the Plant and Machinery in respect of other excisable goods in their case is against the law. They have stated that each of these units viz., Aerated Waters, P or P Medicines, Steel Furniture and Tariff Item 68 goods is independent by itself and not one single unit, and is also functioning under separate Central Excise licence. Their point is that they are separate legal entities maintaining the separate sets of accounts for both Central Excise and Sales Tax purposes. On these grounds they urge that their claims for refund deserve to be allowed.
4. The first basic issue to be decided in the matter would be whether the five units under the name and style of M/s Spencer & Co., Madras could be held to be separate units for the purposes of Central Excise.
Another important question that would be relevant for decision in the present appeal is whether the five factories are separately registered companies under the Companies Act and whether the said five units are separate assessees for the purposes of Sales Tax and the nature of assessment under the Income-tax Act. Since the necessary document which would throw light on the matter was not available, the appellants were directed through its representative to produce the assessment of M/s Spencer & Co. (Income Tax as also Sales Tax for the relevant period) as well as the Certificate of Incorporation under the Companies Act.
5. From the papers produced by the appellant, the following facts emerge: (i) The factories in question are separate divisions and are located at separate places and are not situated under one roof, (iii) So far as Sales Tax assessment is concerned, there is only one assessment for the Company in the State of Tamil Nadu.
(iv) As regards Income-tax assessment, the Company is assessed as a whole.
(v) As per the Certificate of Incorporation, there is only one unit and they are not separate legal entities.
6. Shri Srinivasan had, on behalf of the appellants, strenously argued that the fact that there is a single assessment of Sales Tax and Income Tax and the fact that there is one Company as evidenced by the Certificate of Incorporation under the Companies Act, would not in any way alter the position of the exemption allowable under the Central Excises and Salt Act by virtue of Notification No. 89/79, as superseded by Notification No. 105/80, dated 19-6-80.
7. Controverting the arguments advanced on behalf of the appellant, Shri Tayal, SDR, urged that as has been succinctly stated in the order of the Appellate Collector the question to be decided in this appeal is whether the words used "industrial units" in the proviso to the Notification apply to the entire factory or only to that part of the factory which produces goods under Tariff Item 68. From a perusal of the relevant Notification, Shri Tayal submitted that in view of the fact that in Notification No. 89/79, the expression 'factory' has been assigned the meaning given to it in the Factories Act, it would not be possible to treat the expression 'industrial unit' as of synonymous with the expression 'factory'. Therefore, Shri Tayal submitted that the appeal merits rejection.
8. We have carefully considered the submissions made on behalf of the appellants and we have meticulously perused the papers, including the Certificate of Incorporation under the Companies Act made available by the appellant in pursuance of our directive. We are unable to agree with the view that notwithstanding the fact that the units are not distinct legal entities, the Company would still be eligible for exemption on the basis of the Notifications stated in support thereof.
A careful perusal of the Notifications in question would doubtless go to confirm the legal position as stated in Para '4' of the Order of the Appellate Collector and there is no justification to take a view different from that. In view of the expression "said goods" which according to the appellant would be goods covered by Tariff Item 68 and not other goods, the language of the proviso leaves us in no doubt in accepting the view of the Appellate Collector as well taken.
Accordingly, the appeal is rejected.