Commissioner of C. Ex. Vs. United Esters and Nitrochem Ltd.

Commissioner of C. Ex. vs United Esters and Nitrochem Ltd.

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Mar 04, 2003

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Citation: sooperkanoon.com/30186
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: S T Gowri, G Srinivasan
Decided On: Mar 04, 2003
Subject: Land Acquisition

Case Summary

AI-generated summary - not the official court judgment text.

Land Acquisition

Key legal issue: Land Acquisition

Parties & Advocates

Appellant / Petitioner

Commissioner of C. Ex.

Respondent

United Esters and Nitrochem Ltd.

Legal References

Reported In: (2003)(156)ELT389Tri(Mum.)bai

Excerpt

.....not paid. the basis for the demand was that cellulose products of india ltd. cleared the goods in excess of the value of rs. 2 crores in the preceding financial year 1989-90. the respondent had manufactured and cleared the goods from 25-1-1991 in a factory which earlier belonged to cellulose products of india ltd. therefore, one of the conditions contained in paragraph 3(b) of the notification, that the aggregate value of clearances of excisable goods for home consumption by one or more manufacturer from a factory during the preceding year should not exceed rs. 3 crores had been contravened.the assistant collector confirmed the proposal in the notice. the assessee appealed this order. the commissioner (appeals) found that the respondent had purchased on 14-12-1990 some plant and machinery from cellulose products of india ltd. as also part of the land and factory premises of cellulose products of india and this machinery, plant and premises became part of the assessee's plant thereafter. he therefore concluded that it was not correct to say that the entire goods cleared by the assessee between december, 1990 to march, 1991 were manufactured in the same factory as that of cellulose products of india ltd. and found that there was no justification for denying the exemption. this order is being challenged by the commissioner.2. the appeal reiterates the same ground as the notice, contending that no exemption is possible by virtue of sale of part of the factory involving different manufacturers. the appeal does not question the finding of the commissioner (appeals) that it was only part of the premises and the plant and machinery of cellulose products of india ltd that was transferred to the respondent. nor is it the department's case that cellulose products of india ltd. ceased to produce anything after the sale. in other words, there is nothing to show that cellulose products of india ltd. did not have a factory after the sale of part of its machinery to the.....

Full Judgment

1. The notice issued to United Esters & Nitrochem Ltd., the respondent to this appeal, proposed to deny to it the benefit of the exemption contained in Notification 175/86 for the period 25-1-1991 to 31-3-1991 and to demand duty consequently not paid. The basis for the demand was that Cellulose Products of India Ltd. cleared the goods in excess of the value of Rs. 2 crores in the preceding financial year 1989-90. The respondent had manufactured and cleared the goods from 25-1-1991 in a factory which earlier belonged to Cellulose Products of India Ltd. Therefore, one of the conditions contained in paragraph 3(b) of the notification, that the aggregate value of clearances of excisable goods for home consumption by one or more manufacturer from a factory during the preceding year should not exceed Rs. 3 crores had been contravened.

The Assistant Collector confirmed the proposal in the notice. The assessee appealed this order. The Commissioner (Appeals) found that the respondent had purchased on 14-12-1990 some plant and machinery from Cellulose Products of India Ltd. as also part of the land and factory premises of Cellulose Products of India and this machinery, plant and premises became part of the assessee's plant thereafter. He therefore concluded that it was not correct to say that the entire goods cleared by the assessee between December, 1990 to March, 1991 were manufactured in the same factory as that of Cellulose Products of India Ltd. and found that there was no justification for denying the exemption. This order is being challenged by the Commissioner.

2. The appeal reiterates the same ground as the notice, contending that no exemption is possible by virtue of sale of part of the factory involving different manufacturers. The appeal does not question the finding of the Commissioner (Appeals) that it was only part of the premises and the plant and machinery of Cellulose Products of India Ltd that was transferred to the respondent. Nor is it the department's case that Cellulose Products of India Ltd. ceased to produce anything after the sale. In other words, there is nothing to show that Cellulose Products of India Ltd. did not have a factory after the sale of part of its machinery to the respondent. In that situation, it can hardly be said that the respondent manufactured the goods in a factory which earlier belonged to Cellulose Products of India. No doubt, part of the production took place in a premises which earlier belonged to Cellulose Products of India and by utilising the machinery and plant which belonged to that company. In other words, merely obtaining part of the premises of another factory and some of its machinery does not amount extinction of the identity of the earlier factory. That factory would continue to exist, despite the sale of some part of its building and machinery. We therefore do not find any ground for interference.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Commissioner of C. Ex. vs United Esters and Nitrochem Ltd. Same Subject Land Acquisition Same Judge S T Gowri, G Srinivasan