2002 (7) TMI 487 - AT - Central Excise

Summary

Issues Involved:
1. Clubbing of value of clearances for assessment.
2. Demand of duty on goods clandestinely manufactured and cleared.
3. Liability of M/s. Super Star and M/s. Five Star for duty and penalties.

Summary of Judgment:

1. Clubbing of Value of Clearances:
The Show Cause Notice proposed clubbing the value of clearances of M/s. Super Star and M/s. Five Star on grounds such as shared office space, common telephone usage, shared management and accounting, joint financing, and shared machinery. The Commissioner found that both units operated under the same management and had significant financial interdependence, thus justifying the clubbing of clearances. However, the Tribunal noted inconsistencies in the Commissioner's findings, particularly the simultaneous treatment of M/s. Five Star as an independent entity for certain liabilities. The Tribunal emphasized that either the units are independent or they are not, and the Commissioner's order lacked consistency and clarity.

2. Demand of Duty on Goods Clandestinely Manufactured and Cleared:
The Commissioner confirmed the demand of duty on M/s. Super Star for clandestine manufacture and clearance of goods using unaccounted PVC resin. However, the Tribunal found that the Commissioner failed to provide sufficient evidence to prove clandestine manufacture and clearance. The Tribunal highlighted the necessity of concrete evidence to support such allegations and found the Commissioner's conclusions to be unsupported by the facts presented.

3. Liability of M/s. Super Star and M/s. Five Star for Duty and Penalties:
The Commissioner held M/s. Super Star liable for the entire duty amount and imposed penalties under various sections of the Central Excise Rules. M/s. Five Star was also held liable for certain clandestine clearances and penalized accordingly. The Tribunal, however, found that the Commissioner's approach of holding both units liable for different aspects was contradictory. The Tribunal set aside the order, stating that the units should be treated as independent entities, and the demands based on clubbing of clearances were unsustainable. Consequently, all penalties and interest claims were also set aside.

Conclusion:
The Tribunal set aside the Commissioner's order, allowing the appeals and concluding that the units should be treated as independent entities for the purposes of duty assessment. The demands based on clubbing of clearances and allegations of clandestine manufacture were found to be unsupported by sufficient evidence.