K. Prakash Anand, Member (T)

1. The issue for decision in this matter is whether a Central Excise license, already licensed for manufacture of goods, which are liable to duty, can be compelled to include in ground plans for his A.L. 4 premises his adjoining factory producing exempted excisable goods, thereby availing of only one licence for both premises.

2. Shri D.N. Mehta, Advocate, appearing on behalf of the appellants, stated that the appellants, for the last many years, have been manufacturing sheets/circles of copper and copper alloys, apart from manufacturing billets from scrap or duty-paid virgin metal. The billets fall under Item 26A(1) of the Central Excise Tariff and are fully exempt under Government of India Notification No. 119/66-C.E. dated 16th July, 1966, as amended. Exempted billets are stored in the relevant premises along with old scrap and duty paid metal received from Government agencies as well as cuttings of duty paid sheets and circles. Duty paid un-cut sheets and circles received from the adjoining premises after payment of duty and against duty paying documents, are also kept here. The duty paid un-cut sheets and circles are later cut according to customer's requirement and supplied as such. The remnant cuttings are re-cycled with old scrap and virgin metal in the manufacture of billets.

3. In the Rolling Milk of the appellants, the billets manufactured in the adjoining premises are received and accounted for as raw material and subsequently rolled into sheets/circles.

4. Shri D.N. Mehta pointed out that the appellants had been holding Central Excise Licence since 1961. The Licence had been renewed from time to time up to December, 1979. When the Excise authorities raised the point that the existing ground plan in Form L. 4 covered only the Rolling Mill Section whereas it' should also include the adjoining premises where the appellants are manufacturing copper billets. Shri Mehta stated that since the inception of Excise Duty under Tariff Item 26A, duty has been collected only on the final products, namely, sheets and circles. In view of the duty exemption in respect of the billets, they were also exempt from taking out Central Excise Licence for the premises in which these billets were manufactured under a Notification of the Government of India.

5. It was further contended on behalf of the appellants that the segregation of the billets manufacturing section from the Rolling Mill section by erection of a wall and the removal of the linking gate and the licensing of only the Rolling Mill had been duly approved by the Excise authorities at the higher level of Shri B.N. Banerji, then Member, Central Board of Excise and Customs, who accompanied by the then Collector of Central Excise, Shri S.C. Mathur, had also visited the factory. Later on, it was claimed that the factory was also visited by the then Collector of Central Excise, Shri B.D. Deshmukh, who was satisfied with the segregation of the premises. The issue, once having been settled and having become the established practice over long years, should not have been re-opened in 1979. In fact, when the matter went up in appeal to the Central Board of Excise and Customs, the CBEC had remanded the matter back to the Collector of Central Excise, directing that the fact that the appellants had enjoyed the facility over such a long time could not be lightly brushed aside and that there was no indication as to why there was a change in approach of the local Excise authorities. The Collector was asked to re-examine the matter and to give detailed reasons for his decision in the matter.

6. In his de novo adjudication order, the Collector confirmed the earlier' decision asking the appellants to apply for a Central Excise Licence for both the premises together on the grounds that both the units are dependant on each other and hence these cannot be treated as separate units, that since the units are engaged in the manufacture of billets as well as the rolling of