ORDER
Jyoti Balasundaram, Member (J)
1. This appeal arises against the order dated 28-2-1989 of the Collector (Appeals) confirming the order of the Assistant Collector, rejecting the application of the appellants for one consolidated licence in the following background:-
2. The appellant which is a company registered under the Companies Act 1956 has a factory complex at Jaykaynagar, Kota. In this factory complex, which consists of several sub-divisions, the appellant inter alia manufactures polyester staple fibre, acrylic staple fibre, polyester filament yarn and nylon filament yarn. One of the divisions of the factory complex is J.K. Staple and Tows which is a pan of J.K. Synthetics Ltd., which is the legal entity. The appellant, applied for licences in Form AL-4 for the manufacture of the aforesaid products. 3 licences have been issued in the name of J.K. Synthetics Ltd. for the manufacture of nylon/polyester and tyre cord. 4 licences have been issued in the name of “M/s J.K. Staple and Tows, Kota (Prop: M/s J.K. Synthetics Ltd. Kota)” for the manufacture of polyester staple fibre/acrylic staple fibre. Since the appellant had been issued 7 L-4 licences for the manufacture of the aforesaid products and since all the aforesaid products were being manufactured within the same factory complex in various sub-divisions, the appellant considered it expedient and proper as well as more convenient operationally and administratively, to apply to the excise authorities to issue one consolidated licence in Form L-4 in respect of the products manufactured by it within its aforesaid factory complex.
3. On 1st July 1985, the appellant wrote to the Superintendent of Central Excise, Kota that since all the units in which the aforesaid goods were being manufactured were under the proprietorship of the appellant and since the appellant was having a common connection at its 132 KVA sub-station from which power was being supplied to all its units and since utility services etc. were common to all the units, the appellant may be granted one consolidated licence to manufacture the aforesaid goods. By letter dated 5th August, 1985 the Superintendent of Central Excise, Kota rejected the request of the appellant. On receipt of the aforesaid letter of rejection, the appellant by its letter dated 28th August, 1985 addressed to the Assistant Collector of Central Excise, Kota, requested the said Assistant Collector to grant the appellant one consolidated licence in respect of its aforesaid factory complex for the manufacture of the said goods. The Superintendent of Central Excise issued an order on 7th November, 1985 accepting the request of the appellant and permitted the appellants to maintain one licence for the manufacture of the aforesaid goods at its aforesaid complex. The appellants received a letter dated 30th December, 1985 from the same Superintendent who had passed the order dated 7th November, 1985 in which the Superintendent requested the appellant to maintain status-quo in respect of the Central Excise licences till further orders.
4. In the mean time the Central Government issued Notification No. 244/86-C.E., dated 3rd April, 1986. By this notification certain amendments were made in Rules 174,176, 178 and 181 of the Rules, as well as in certain forms set out in Appendix I to the Rules. One of the forms that was amended was the form AL-4 i.e. the form of the application for licence under Rule 176 of the Rules to manufacture goods. The appellant by its letter dated 21st July, 1986 addressed to the Superintendent of Central Excise, Kota once again requested the said Superintendent to issue to the appellant one consolidated licence for the manufacture of goods at its factory premises. Alongwith the letter the appellant submitted an application in the amended form AL-4 for the issuance of one licence to manufacture goods at its aforesaid factory complex. The Superintendent of Central Excise by letter dated 29th July, 1986 returned the application in form AL-4 to the appellant, stating that the appellant was not eligible to obtain one licence.
5. By letter dated 30th April, 1987, the appellant once again requested the Assistant Collector to grant it permission to obtain one licence for the manufacture of all the aforesaid goods, and by order dated 11th November, 1987 the Assistant Collector rejected the request of the appellant for consolidation of its excise licences. This was upheld by the Collector (Appeals) in the impugned order. Hence this appeal.
6. We have heard Shri Ravinder Narain, learned advocate and Shri G. Bhushan, learned SDR and gone through the records.
7. Prior to the application for one consolidated L-4 licence, the appellants held the following licences:-
1. L-4 No. 1/Synthetic fibre & yarn including textured
yarn dated 25-9-1976.
2. L-4 No. 1/Plastic material (polyester, Polymer
polyamide Chips/76 dated 25-9-1976.
3. L-4 No. 1/UNP/TC/Fab. (N)/83 dated 26-8-1983.
4. L-4 Nos. 1/Synthetic yarn and fibre polyester fibre and
tows/81/Acrylic Fibre/Tows/Tops dated
23-11-71/30-3-79.
5. L-4 No. 8/Synthetic Spun Yarn dated 14-7-1976.
6. L-4 No. 1/Methanol/U-II/85 dt. 26-3-1985.
7. L-4 No. 10/Liq. Nitrogen/T.I. 68/76 dated 5-7-1976.
There is no dispute that the licences against Sl. No. 1 to 3 have been issued in the name of J.K. Synthetics Limited, Kota for Nylon/polyester and Tyre Cord Plants whereas the licences against Sl. No. 4 to 7 have been issued in the name of M/s. J.K. Staple and Tows, Kota (Prop: M/s. J.K. Synthetics Limited, Kota) for Polyester staple fibre/Acrylic Staple fibre Plants. The Superintendent of Central Excise has also held that both the J.K. Synthetic Ltd., Kota synthetic fibre & yarn unit & the J.K. Staple & Tow synthetic fibre & yarn unit are known as & form part of the same factory (vide his order dated 7-11-1985). There is only one legal entity – i.e. M/s. J.K. Synthetics Ltd., Kota (artificial legal person incorporated under the Indian Companies Act, 1956) and M/s. J.K. Staples & Tows is only the synthetic staple fibre division of the public limited Co. – hence the Asst. Collector has erred in treating them as two separate entities.
8. Regarding the contention of separate premises, the Asst. Collector has given a finding that – M/s. J.K. Staples & Tows and M/s. J.K. Synthetics Ltd., Kota have separate premises situated at different places and manufacturing different excisable goods. The lower appellate authority has wrongly held that there is no denial by the appellants on this aspect – the Collector (Appeals) has erred in this conclusion as ground 6 of the grounds of appeal to the Collector (Appeals) clearly mentions to the contrary.
9. We have perused the approved ground plan submitted by the appellants to the Department. The two units fall within the same premises within one boundary wall encircling the entire area of land allotted to the appellant in the industrial area. The form of licence L-4 is an authorisation to manufacture excisable goods “in the situation and description of premises as described in the application for licence”. In the application, in form AL-4, a declaration is required to be made of the particulars of the premises where the manufacture of goods is to take place. Para 2 of the application reads as follows:-
“I/we hereby declare particulars in the schedule of the premises where I/we carry on business for manufacture of such goods”
Para II of the schedule contains the description of the premises which is required to be given in the following terms:
1. Brief description (with boundaries) of the premises intended to be used as a factory….
2. Description of each main division or sub-division of the factory….
3. Store room and other place of storage….
Thus as it is clear from the form for the licence in form L-4, the description of premises where excisable goods are manufactured is as given in the application AL-4 for the grant of the licence. The description in the application AL-4 refers to a factory and main division or sub-division of factory where goods are manufactured. Thus it is apparent that what is contemplated is one licence in respect of one factory complex having main divisions or sub-divisions. The appellant is entitled to obtain one consolidated licence for the manufacture of its goods within its aforesaid factory complex, as the object behind the grant of a consolidated licence is that any person manufacturing different excisable goods within one factory area is entitled to obtain one licence in respect of the goods instead of different licences for different commodities, as “factory” has been defined in Section 2(e) of the Central Excises & Salt Act, 1944 as any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on.
10. In the light of the above discussion the impugned order is set aside and the appeal allowed.