ORDER
M. Santhanam, Member (J)
1. This appeal is against the order of the Appellate Collector of Central Excise, New Delhi dated 11-3-1982.
2. The respondents filed a refund claim of Rs. 5,13,562.70 on 28-7-1978 on the ground that the Capital Investment on the Plant & Machinery installed in the Cable Conductor Portion of the manufacturing unit was not more than Rs. 10 lacs and that the benefit of Notification 199/75 should be extended to them. The refund claim related to the period 11-9-1975 to 28-2-1978. The party had also made the payment under protest. The face value of the machinery in the year 1969-70 was to the tune of Rs. 7,69,869.00 and after giving due allowance for depreciation etc., the value of the Plant & Machinery was Rs. 534,682.00. The Asstt. Collector held that the value of the Plant & Machinery was Rs. 10,48,918.00. The Asstt. Collector also held that the respondents were manufacturing aluminium rods in the same unit and that the capital investment on that Plant & Machinery installed in the Industrial Unit should also be taken into account in which event the respondents would not be entitled to the benefit. On appeal, the Appellate Collector held that the term Industrial unit” should be construed as the Plant & Machinery installed for the manufacture of the product for which the benefit of exemption was claimed. He held that the aluminium rods fell under different Tariff Item (T.I. 27) and that the Capital Investment on Plant & Machinery for the manufacture of aluminium rods should not be taken into consideration. The Revenue has come forward with this appeal urging that the term “industrial unit” would cover not only that part of the manufacturing unit or a factory which is used for the manufacture of a particular commodity but would appear to include the entire unit or the factory in which such goods were manufactured.
3. Shri A.K. Jain, SDR stated that the Plant & Machinery required for manufacture of T J. 27 items should be taken into consideration for those Plant & Machinery are also necessary and incidental for the manufacture of products under T.1.33B. He placed reliance on the decision of the Tribunal reported in 1983 E.L.T. 1212 (Spencer and Company Limited, Madras v. Collector of Central Excise, Madras). In that decision, the Tribunal held that the term “industrial unit” in proviso to Notification 89/79, dated 1-3-1979 will refer to the entire industrial complex namely, the manufacture of all excisable goods. In that case, the value of Plant & Machinery in the manufacture of aerated waters, P & P Medicines and Steel furniture were considered as a single unit. The SDR also urged that since the respondents have collected the duty from the buyers, they cannot claim the refund. He relied on 1986 S.T.C. (62) 130 (AmarNath Om Parkash and Ors. v. The State of Punjab and Ors.).
4. Shri V. Lakshmi Kumaran, stated that the doctrine of unjust enrichment will not apply and relied on 1985 (22) E.L.T. 539 [Collector of Central Excise, Guntur v. Andhara Asphalt (P) Ltd.] and also 1986 (26) E.L.T. 394 [Sahu Cylinders and Udyog (P) Ltd. v. Collector of Central Excise, Madras].
5. On merits, he urged that the respondents factory was set up in 1964, and ten years later the machinery for wire rods conversion basis was installed. There were five other units in the complex. The Central Excise Licences for the manufacture of the two items are distinct. The ground plans have been submitted and the manufacture is carried on in two different sheds. He relied on the decision of the Bombay High Court reported in 1984 (16) E.L.T. 30 (Devidayal Electronics & Wires Ltd. and Anr. v. Union of India and Anr.. In that case, the question arose in regard to the benefit of Notification 74/78. The appellants therein manufactured electric wires, cables and varnishes. The varnishes were manufactured by a plant in a building used only for that purpose. The Bombay High Court held, “An industrial unit must, therefore, mean a separate or isolable part, concerned with industry, or a complex.” The Plant and Machinery used exclusively for the manufacture of varnishes was held to be an “industrial unit”.
In 1985 (19) E.L.T. 57 (£. Septon and Company Pvt. Ltd. v. Supdt. of Central Excise and Anr., the Allahabad High Court had to consider a similar situation. Two commodities were manufactured and were classified under two different items. It was held that the Revenue could not club the total investment made by the petitioners therein on Plant & Machinery installed in the two units. The learned Counsel also drew our attention to the following decisions of the Tribunal :-
(1) Swastika Metal Works, New Delhi v. C. C.E., N. Delhi (Order No. 590/84-B dated 10-8-1984).
(2) Texspin Engg. & Manufacturing Works Ltd. v. Collector of Central Excise, Bombay (Order No. 204/86-D, dated 3-4-1986).
(3) Velcro India Ltd. v. Collector of Central Excise, Bhavnagar (Rajkot) (Order No. 281-284/86-D, dated 3-5-1986).
6. He urged that the Plant & Machinery in the industrial unit intended for Item 33-B should be taken into consideration for the purpose of determination of the eligibility for the exemption.
7. We have carefully considered the contentions of both the parties. Admittedly, the respondents are manufacturer of item under 33-B (Wires & Cables) from out of aluminium wire rods (T.I. 27). Notification 199/75 exempts electric wires and cables falling under T.I.33-B from so much of the duty as is in excess of duty specified in Col. 4 of the Table Annexed to the Notification. But in SI. No. 5 it is stated that the Asstt. Collector, Central Excise should be satisfied that the Capital Investment of Plant & Machinery only installed therein is not more than Rs. 10 lacs. It envisages manufacture of electric wires and cables by an industrial unit. Hence the requirements of the notification are (i) Manufacture of Electric Wires and Cables; (ii) By an industrial unit; and (iii) The Capital Investment on Plant & Machinery only installed therein is not more than Rs. 10 lacs. In this case, the respondents manufactured electric wires and cables. This is an industrial unit and the Plant & Machinery installed therein is less than Rs. 10 lacs. The Asstt. Collector denied the benefit of the notification on the ground that the respondents manufacture aluminium rods and the investment on the Plant & Machinery for those items are also to be clubbed to determine the capital investment of the industrial unit. But an identical question came up before the Bombay High Court in Devi Dayal’s case and the Bombay High Court emphasising on the word “unit” has held that an “industrial unit” must be a separate or isolable part concerned with the industry or a complex Even though the respondents may have the Plant & Machinery for the manufacture of other items, the benefit of the notification cannot be denied to them, for, the industrial unit in which the exempted goods are manufactured should alone be taken into consideration. The Allahabad High Court also held that when two different items are manufactured, the value of the Plant & Machinery of those items should not be clubbed. The Tribunal has followed the above decision. In the cases (cited supra) where the notifications contained identical words. Two units here, are (i) for the manufacture of aluminium rods; and (ii) for the manufacture of wires and cables. Since the aluminium rods formed the rawmaterial for the wires and cables, Shri A.K. Jain was asked whether there was any decision of any other High Court against the decisions of the Bombay High Court or Allahabad High Court. Shri Jain stated that there is no decision to the contrary. The Tribunal’s decision in 1983 E.L.T. 1212 was pronounced prior to the decision in Devi Dayal’s case. We respectfully follow the decisions of the Bombay High Court and the Allahabad High Court and hold that the value of Plant & Machinery in respect of manufacture of Item 33-B alone should be taken into consideration for the purpose of assessing the eligibility of Notification 199/75.
8. We also find that the ground plans in the two manufacturing units are separate. The Central Excise Licences are distinct. Shri Lakshmi Kumaran submitted that the sheds are also different though they are located in the same complex, in view of the paucity of space.
9. The doctrine of unjust enrichment urged by the SDR is also not tenable, in view of the decisions of the Tribunal (cited supra). The citation in 1986 S.T.C. (62) 130 has no relevancy because the Hon’ble Supreme Court had to consider the constitutional validity of Section 23-A of Punjab Agricultural Produce Markets Act which provided for retention of the licence fee by the Market Committee instead of refunding it to the dealers. This has no application to the present facts.
10. In view of the above findings, we hold that the present appeal by the department has to be rejected and we accordingly do so