Per V.K. Agrawal:

The issue involved in these two appeals filed by M/s. The Dhampur Sugar Mills is whether the benefit of Notification No. 67/95-CE dated 16.3.95 is available in respect of Molasses used in the manufacture of chemicals by them.

2. Shri Ashok Kumar, learned Advocate submitted that the Appellants are having in their factory at Dhampur three units for manufacture of different excisable goods, namely, sugar, Molasses, Paper and Paper Board and chemicals; that the goods manufactured in one plant is used in another plant for manufacture of another excisable goods; that the Department had disallowed them the benefit of Notification No. 67/95-CE on the ground that all the three divisions have been separately registered; that as all the three plants are established in the same factory boundry, the exemption under Notification No. 67/95 cannot bedenied; that it has not been disputed by the Commissioner (Appeals) that the chemical plant as well as sugar plant are situated within the same factory premises; that even in the show cause notice dated 7.9.94 the Department had clearly mentioned that they are having three plants all situated within one and the same factory premises; that the Appellate Tribunal in their own case, CCE, Meerut vs. Dhampur Sugar Mills Ltd., 1988 (33) ELT 509, has held that "a mill may contain more than one plant each producing different category or goods answering to the general description of goods manufactured in that category of mills.................In case there is one establishment in which there is a paper plant and also a different plant for making board then the whole set up has to be taken as one mill. It is significant to note that in the present case both the plants function under the same management and are in the same campus". The learned Advocate further submitted that the definition of "factory" as given in Section 2(e) of the Central Excise Act makes it clear that the meaning of factory is not restricted to only the part in which excisable goods are manufactured and it includes the whole of the premises in a part of which such goods are manufactured. Reliance was placed on the decision in the case of J.K. Synthetics Ltd. Vs. CCE, 1991 (52) ELT 116 (T).

3. Countering the arguments Shri S.N. Singh, learned SDR, submitted that the Appellants have taken three separate registration and as such they are three different factories; that the benefit of Notification No. 67/95 is available, if excisable goods are used within the factory of production. As the Molasses is produced in sugar plant and is used in the manufacture of chemical in chemical plant which is registered independently it cannot be said that the excisable goods are used within the factory of production; that separate factories are only registered separately. He relied upon the decision in the case of Devidayal Electronics and Wires Ltd. Vs. UOI, 1984 (16) ELT 30 (Bom), wherein it was held that the word "industrial" means pertaining to or of the nature of, industry or productive labour and an industrial unit must, therefore, mean a separate or isolate part, concerned with industry, of a complex; that the Bombay High Court, therefore, held that the capital investment made on plant and machinery installed in industrial unit is not to be computed for whole factory but only for plant and machinery used in the manufacture of goods in question. The learned SDR also mentioned that in their own case, CCE, Meerut Vs. Dhampur Sugar Mills, 1998 (26) RLT 669, the Tribunal held that industrial undertaking is to be taken as the industrial unit in which paper and paper products are manufactured and not all the undertakings including sugar mills put up together at the same location.

4. We have considered the submissions of both the sides. As per Section 2(e) of the Central Excise Act "factory" means any premises, including the precincts thereto, wherein or in any part of which excisable goods other than the salt are manufactured, or wherein