"http://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 1 of 3 \nCASE NO.:\nAppeal (civil) 6581 of 2002\nPETITIONER:\nM/s.Rollatainers Limited\nRESPONDENT:\nCommissioner of Central Excise,Delhi-III.\nDATE OF JUDGMENT: 29/07/2004\nBENCH:\nN.SANTOSH HEGDE & A.K.MATHUR.\nJUDGMENT:\nJ U D G M E N T\nW I T H\n(CIVIL APPEAL NO.6635 OF 2002)\nA.K.MATHUR,J.\nBoth these appeals arise out of the common order of the Customs Excise and \nGold (Control) Appellate Tribunal (hereinafter referred to as the ’Tribunal’) dated \nJune 7,2002. Therefore, they are disposed of by this common order.\n \n \nBrief facts which are necessary for the disposal of both appeals are as under. \nM/s.Rollatainers Limited (hereinafter referred to as the ’appellant’), is a limited \ncompany registered under the Companies Act, 1956. The appellant is engaged in \nmanufacture of various products in seven of its factories situated in different \npremises, each of them duly and separately registered with the Central Excise \nDepartment. Out of the seven factories, two factories which are relevant for the \npurpose of these appeals are: (i) Paper Board Factory and (ii) Specialty Paper \nFactory. The paper board division is situated in Shed No.1, Narela Road, Kundli \nand engaged in manufacture of duplex board independently with its own set of \nplant and machinery, staff and workers, raw material and utilities like electricity, \nwater etc. Specialty Paper Factory is situated in Shed No.3, Narela Road, Kundli \nand engaged in manufacture of paper independently with its own set of plant and \nmachinery, staff and workers, raw material and utilities like electricity, water etc. \nPrior to May, 1998, the Specialty Paper Factory was situated at Dharuhera with \naccumulated stock of finished goods. The appellant decided to transfer such \nfinished stock of specialty paper factory to paper board factory and dispose of the \naccumulated stock of finished goods under the Central Excise registration issued to \npaper board factory. The ground plan of the paper board factory prior to May, \n1998, showed shed no.3 as a godown for storage of its raw material, namely waste \npaper. Thereafter, the ground plan was amended in May, 1998, to show the \nspecialty paper factory in shed no.3 for storing the finished goods \nmanufactured at Dharuhera and clearing them on payment of duty. Accordingly, \nclassification list was also filed for the purpose of clearing the stock manufactured \nat Dharuhera. Subsequent to erection of the plant and machinery of specialty paper \nfactory shifted from Dharuhera to shed no.3, Narela Road, Kundli and manufacture \nof paper in such separate premises by separate staff and workers who were earlier \nemployed at Dharuhera, were engaged and the appellant applied for Central Excise \nregistration as provided under Rule 174(3) of the Central Excise Rules, 1944. No \nportion of the manufacturing process of paper board factory was ever carried on in \nshed no.3 wherein exclusively specialty paper factory operations were carried out. \nThe registrations issued to the paper board factory and the specialty paper factory \nwere premises specific as stipulated under Rule 174(3) which reads as under:\n\" Every registration certificate granted shall be in \nthe specified form and shall be valid only for the \n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 2 of 3 \npremises specified in such certificate.\"\nThe registration carried out certain conditions also like, that it is valid only \nfor the premises and purposes specified in the schedule and for no other purposes \nand premises; it is not transferable and no correction will be admissible in the \ncertificate unless attested by the Superintendent, Central Excise and the certificate \nshall remain valid till the holder carries on the activity for which the certificate has \nbeen issued or surrenders the same. Therefore, both the factories were granted \nseparate registration. It was also pointed out that no manufacturing processes \npertaining to the manufacture of paper board was carried on in the shed no.3 for \nwhich specialty paper factory was granted registration. Only manufacturing \nprocesses for manufacture of paper were carried on in shed no.3. It was also stated \nthat both the factories had their separate entrances and are separated by a clear \npassage of 10 ft.\nThe Central Excise Department issued a notification being Notification \n6/2000- Central Excise dated March 1,2000 and as per serial No.77 of the aforesaid \nnotification, paper and paperboard or articles made therefrom in a factory is \nchargeable to ’nil’ rate of duty subject to condition no.15 of the notification that \npaper and paperboard or articles made therefrom manufactured, starting from the \nstage of pulp, in a factory, and such pulp contains not less than 75% by weight of \npulp made from materials other than bamboo, hard woods, soft woods, reeds (other \nthan sarkanda) or rags and it was specifically mentioned that the exemption shall \napply only to the paper and paperboard cleared for home consumption from a \nfactory. Therefore, the aforesaid exemption was availed of by the appellant’s \nfactories.\nBut the trouble started on March 19, 2001 when individual show cause \nnotice was issued to the factories of the appellant objecting to the availing of the \naforesaid concession by each of the factories. The basis of issuance of the show \ncause notice was on the ground that both the factories are in the common \npremises and common balance-sheet is maintained and owned by the same \ncompany. The issue was adjudicated by the Commissioner, Central Excise, Delhi-\nIII and duty was claimed in sum of Rs.50,25,117.00 under Section 11A(1) of the \nCentral Excise Act, 1944 and penalty of Rs.5 lacs. Aggrieved against this order, \ntwo appeals were preferred before the Tribunal and the Tribunal affirmed the \norder. Hence, the present appeals by way of special leave.\nThe question that arises for consideration in both these appeals is whether \nboth these factories are one or they are separate. The Tribunal by its order dated \nJune 7, 2002, affirmed the order of the lower authority and came to the conclusion \nthat they are one and accordingly, affirmed the duty as well as the penalty.\nThere is no two opinion that both the factories are near to each other and it is \nowned by the same owner and the common balance-sheet is maintained. But, by \nthis can it be said that both the factories are one and the same ? The definition of \nthe ’factory’ as defined in Section 2(e) of the Central Excise Act, 1944, reads as \nunder :\n\" (e) ’factory’ means any premises, including the \nprecincts thereof, wherein or in any part of which \nexcisable goods other than salt are manufactured, or \nwherein or in any part of which any manufacturing \nprocess connected with the production of these \ngoods is being carried on or is ordinarily carried \non;\"\nSimply because both the factories are in the same premises that does not lead \nto the inference that both the factories are one and the same. In the present case, \nfrom the facts it is apparent that there is no commonality of the purpose, both the \nfactories have a separate entrance, there is a passage in between and they are not \ncomplimentary to each nor they are subsidiary to each other. The end product is \nalso different, one manufactures duplex board and the other manufactures paper. \nThey are separately registered with the Central Excise Department. The staff is \nseparate, their management is separate. It is also not the case of revenue that end \nproduct of one factory is raw material for the other factory. From the above facts it \nis apparent that there is no commonality between the two factories, both are \nseparate establishments run by separate managers though at the apex level it is \nmaintained by the appellant company. There are separate staff, separate finished \ngoods. Simply because both the factories may have common boundaries that will \n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 3 of 3 \nnot make it one factory. Accordingly, we are of the opinion that the view taken by \nthe Tribunal does not appear to be well-founded and likewise, the view taken by \nthe Commissioner, Central Excise. Accordingly, we allow both these appeals, set \naside the order of the Tribunal passed on June 7,2002 as well as the order passed \nby the Commissioner, Central Excise, New Delhi-III on September 28,2001 in \nboth the appeals. No order as to costs.\n"