M/S ROLLATAINERS LIMITED versus COMMISSIONER OF CENTRAL EXCISE, DELHI-III

Citation: [2004] SUPP. 3 S.C.R. 216 · Decided: 29-07-2004 · Supreme Court of India · Bench: N. SANTOSH HEGDE · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
MIS ROLLAT AINERS LIMITED 
v. 
COMMISSIONER OF CENTRAL EXCISE, DELHI-Ill 
JULY 29, 2004 
B 
(N. SANTOSH HEGDE AND A.K. MATHUR, JJ.] 
Central Excise Act, 1944: 
Ss. 2(e) and 11A(I)-Notification No. 612000-CE dated 1.3.2000-
C Exemption claimed by two factories owned by one company-The two 
factories with separate establishments and manufacturing different finished 
products-Issued separate premises specific registrations-Held, simply 
because both the factories are in the same premises and may have common 
boundaries, does not lead to the inference that the two factories are one 
D and the same-Both the factories are entitled to exemption separately-
Central Excise Rules, 1944-r.174(3). 
Appellant-company owned two factories namely, (1) Paper Board 
Factory, engaged in manufacture of duplex Board and (ii) Speciality 
Paper Factory, manufacturing paper. The former was situated at Shed 
E No. 1 and the latter at shed No. 3. Prior to 1998 Shed No. 3 was a 
godown for Paper Board Factory and Speciality Paper Factory was 
located at a different place. Accumulated stock of Speciality Paper 
Factory was transferred to Paper Board Factory and disposed of under 
the Central Excise Registration issued to Paper Board Factory. Later, 
F plant and machinery of Speciality Paper Factory were shifted to Shed 
No. 3, and. a separate registration was issued to it. Both the factories 
were in separate premises and had their separate plants and machinery 
run by separate staff and different managrs. The registrations issued 
separately to the two factories were premises specific as stipulated 
G under Rule 174(3) of the Central Excise Rules, 1944. 
The Central Excise Department issued Notification No. 6/2000-
CE dated 1.3.2000 whereunder paper and paper board or articles 
made therefrom in a factory upto a certain quantity were chargeable 
to 'nil' rate of duty subject to the condition stipulated therein. This 
H exemption was availed of by the two factories of the appellant. 
216 
ROLLATAINERS LTD. v. C.C.E. 
217 
However, on 19.3.2001 individual show cause notices were issued to the A 
factories of the appellant objecting to availing of the concession by each 
of the factories, stating that both the factories were in common 
premises, were owned by the same company and common balance-
sheet was maintained. Demand was raised u/s llA(l) of the Central 
Excise Act, 1944. The Commissioner confirmed the demand and B 
imposed a penalty. The Customs Excise and Gold (Control) Appellate 
Tribunal affirmed the order of the Commissioner. Aggrieved, the 
appellant filed the present appeals. 
Allowing the appeals, the Court 
c 
HELD: From the facts it is apparent that there is no commonality 
of purpose between the two factories. Both are separate establishments 
run by separate staff and different managers, though at the apex level 
maintained by the appellant-company with a common balance-sheet. 
The finished goods are different. Both the factories have a separate 
entrance, there is a passage in between and they are not complimentary D 
to each nor are they subsidiary to each other. They are separately 
registered with the Central Excise Department. It is also not the case 
of revenue that end product of one factory is raw material for the other 
factory. Simply because both the factories are in the same premises and 
may have common boundaries, that does not lead to the inference that E 
both the factories are one and the same. Accordingly, the view taken 
by the Tribunal and the Commissioner, Central Excise does not appear 
to be well-founded; and the orders passed by them are set aside. 
(220-F-H; 221-A-B) 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6581 of F 
2002. 
From the Judgment and Order dated 7 .6.2002 of the Customs, Excise 
and Gold (Control) Appellant Tribunal, New Delhi in Appeal No. 209/ 
2002-D against Final Order No.144/2002-D. 
WITH 
Civil Appeal No. 6635 of 2002 
A.R. Madhav Rao, Alok Yadav, Vishwanath Shukla and V. 
Balachandran for the Appellant. 
G 
H 
218 
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R. 
A 
B. Datta, Additional Solicitor General, Dilieep Tandon, P. Parrneswaran 
and B. Krishna Prasad for the Respondent. 
The Judgment of the Court was delivered by 
A.K.MATHUR, J. : Both these appeals arise out of the common 
B order of the Customs Excise and Gold (Control) Appellate Tribunal 
(hereinafter referred to as the 'Tribunal') dated June 7, 2002. Therefore, 
they are disposed of by this common order. 
Brief fa

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