K.M.JOSEPH,J. - (1.) These appeals arise from a common order passed by the Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi (hereinafter referred to as the "Tribunal") [2015 (324) E.L.T. 201 (Tri. - Del.)]. The substantial questions of law raised are, essentially, the same. We would advert to the following substantial questions of law, which were admitted by the Court and on which notices were issued, as raised in CEXA No. 11 of 2015, which we would treat as the leading case : "1.Whether by virtue of seeking addition of new items viz. ACSR Conductors and Steel Tubular Poles in the original Central Excise Registration Certificate of the existing unit of M/s. Tirupati LPG Cylinders, engaged in the manufacture of LPG Cylinders, with the Conductor Division and Cylinder Division units being part of the same factory (as evident from the party's action in not seeking a separate registration for the Conductor division), was it not necessary for the party to increase the capacity of the entire factory (comprising of Conductor and Cylinder Division) by 25% to qualify being benefited as per the stipulations of Notification No. 50/2003-C.E., dated 10-6-200 as the word 'unit' or 'industrial unit' in common parlance is understood as the factory premises as it was in this context of synonymy that the appellant had on 30-11-2002 sought the addition in their existing certificate of registration? 2. Whether the fact that the Conductor Division of the factory commenced the commercial production before 7-1-2003, does not make the party/respondent not eligible for availing the benefits of Notification No. 50/2003-C.E., dated 10-6-2003, as it has failed to adhere to its stipulations in having failed to commence commercial production on or after 7-1-2003?"
(2.) M/s. Tirupati LPG Industries Ltd. (hereinafter referred to as the "Company") was registered with the Central Excise Department and was engaged in the manufacture of LPG Cylinders. The factory is located in the industrial area Selakui, Dehradun. The company addressed letter dated 30-11-2002 indicating that it wished to start manufacturing of ACSR Conductor and Steel Tubular Poles. A request was made that these products be endorsed in the existing Central Excise registration certificate. The Company addressed letter dated 11-7-2003. Therein, they indicated that they have started manufacturing of ACSR Conductors w.e.f. 1-4-2003. It was pointed out that they would be availing excise exemption benefits under Notification No. 50/2003-C.E., dated 10-6-2003 as a new industrial unit. The SSI Registration showing the product ACSR Conductor being endorsed w.e.f. 1-4-2003 was made available (photocopy). The Company addressed another letter dated 27-11-2003 giving description of the goods and giving the date on which the option under Notification No. 76/2003, dated 5-11-2003 was exercised, which was 20-7-2003. It was stated that the unit was a new one. A clarification was sought by the Superintendent of Central Excise vide letter dated 6-8-2004 in regard to the discrepancy noted in letters dated 11-7-2003 and 27-11-2003, as, while on the one hand, in letter dated 11-7-2003, 1-4-2003 was intimated as the date of production of the Conductors, on the other hand, in letter dated 27-11-2003, 20-7-2003 was shown as the date on which the option under the Notification was exercised. Response from the Company came in the form of communication dated 17-8-2004, wherein it inter alia stated that the Company had commissioned the plant and machinery for the manufacture of ACSR Conductors in the month of April, 2003 and also commenced production of the same; and that there was an expansion programme pertaining to cylinders in process and they filed a composite declaration on 6-1-2004, wherein grounds of exemption for both the products were mentioned. The Department took the stand, apparently, that the Company had evaded Central Excise duty on the clearances of Aluminium Wire with Steel Core (WEASEL) and Aluminium Wire with Steel Core (DOG), inasmuch as, (i) there was discrepancy in the dates, and (ii) the case of the Company of a new unit (Conductor Division) was not correct, as the Khasra Nos. 238/1, 238/2, 235 and 237, at which the Conductor Division was situated, were the same as the one in which the Cylinder Division was situated and it could not be a new unit. The department's case, further, was that the Company had started commercial production of the Conductors well before 7-1-2003 and, hence, the contention that the Conductor Division is a new unit was questioned. The Company also claimed the benefit of the Notification in Clause 2(b) on the score that it had undertaken an expansion of its capacity by more than 25 per cent. The stand of the department, apparently, was that condition in Clause 2(b) of the Notification dated 10-6-2003 was not satisfied insofar as the documentary evidence produced by the Company in the form of Engineer's Certificate did not mention about the enhancement of the installed capacity in regard to the Conductor Division. In other words, the stand of the Department was that there were two types of manufacturing divisions, namely, the Cylinder Division and the Conductor Division. Therefore, the installed capacity must be of both the Divisions together. The enhancement of installed capacity only relating to the Cylinder Division would not suffice to claim benefit under Clause 2(b). Show cause notices were issued proposing to levy duty, besides interest and penalty. After giving an opportunity to the Company, the Commissioner proceeded to take the view that the Company had not correctly availed exemption in the clearances of the excisable goods. It is, inter alia, found with reference to the CBEC's Excise Manual of Supplementary Instructions that, in respect of provisions for registration under Rule 9 of the Central Excise Rules, 2002, separate registration is required in respect of separate premises, only except in cases where two or more premises are actually part of the same factory (where process are interlinked) but are segregated by a public road, canal, railway line, etc. It was found that, if the intention of the Company was to create a new unit in separate premises, they would have applied for separate registration. It was found that there was no new unit. In the balance-sheet for the years 2002-2003 and 2003-2004, both the units were shown simultaneously, wherein, apart from mentioning their depreciation on investment, they are shown together. The balance-sheet is referred to in order to find that they do not show separate units, but a common balance-sheet. It is, further, found that the Conductor unit is not separate from the Cylinder unit in legal terms. The following finding may be seen : "22.3 The noticee in his defence put forth a plea that no commercial production of ACSR conductor was commenced before 1-4-2003 and officers of DIC, Dehradun after visiting their unit in March, 2003, added ACSR conductor in their certificate having started commercial production w.e.f. 1-4-2003. On perusal of the certificate, it came to notice that apart from entry for LPG cylinder, there is another entry for AACR/ACSR conductor as additional product (1-4-2003). In this regard, it is observed that the date 1-4-2003 written alongside the words "Additional Product : AACR conductors/ACSR" only signifies that the said endorsement was made on 1-4-2003 and that the production of the said commodity was commenced on 1-4-2003. In this regard, attention may be drawn to date of issue of the initial certificate by DIC, in respect of cylinders which is 30-6-2001 but the date of production is mentioned as 30-1-2001. This proves that the date of production can be earlier to the date of issue of the certificate. As already pointed out above, all main machines were available with the noticee before 4-1-2003 and new Die continues wire drawing machine was purchased only on 5-4-2003. On the basis of machines purchased during October - December, 2002, DIC has endorsed the registration. Therefore, it may be said that the ACSR conductor division was existing before 7-1-2003 and thus it is not a new unit in terms of Notification No. 50/2003-C.E., dated 10-6-2003." The Notifications :
(3.) It is necessary to have a look at the Notifications. On 10-6-2003, Notification No. 50/2003-C.E. came to be issued. It reads as follows : "In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944) read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the goods specified in Annexure-I appended hereto, and cleared from a unit located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area, as the case may be, specified in Annexure-II appended hereto, from the whole of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts. Provided that the exemption contained in this notification shall apply subject to the following conditions, namely :- (i) The manufacturer who intends to avail of the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year; (ii) The manufacturer shall, while exercising the option under condition (i), inform in writing to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise giving the following particulars, namely :- (a) name and address of the manufacturer; (b) location/locations of factory/factories; (c) description of inputs used in manufacture of specified goods; (d) description of the specified goods produced; (e) date on which option under this notification has been exercised; (iii)The manufacturer may, for the current financial year, submit his option in writing on or before the 30th day of November, 2003. 2. The exemption contained in this notification shall apply only to the following kinds of units, namely :- (a) new industrial units which have commenced their commercial production on or after the 7th day of January, 2003; (b) industrial units existing before the 7th day of January, 2003, but which have undertaken substantial expansion by way of increase in installed capacity by not less than twenty five per cent, on or after the 7th day of January, 2003. 3. The exemption contained in this notification shall apply to any of the said units for a period not exceeding ten years from the date of publication of this notification in the Official Gazette or from the date of commencement of commercial production, whichever is later." ;