2005 (3) TMI 582 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 175/86-C.E. regarding exemption eligibility for an SSI unit.
2. Clubbing of clearances of two companies due to mutuality of interest.
3. Applicability of previous Tribunal decisions and Supreme Court judgment on the case.

Interpretation of Notification No. 175/86-C.E.:
The case involved M/s. Eastern Abrasives Ltd. (EAL), an SSI unit availing exemption under Notification No. 175/86-C.E. for manufacturing Coated Abrasives. The department argued that the clearances of EAL and M/s. Carborandum Universal Ltd. (CUL) should be clubbed due to mutuality of interest, leading to the aggregate clearance exceeding the exemption limit. The original authority and first appellate authority ruled against EAL's eligibility for the exemption, prompting the appeal.

Clubbing of clearances of two companies:
During the dispute period, EAL was held as a subsidiary of CUL, which later merged with CUL in 2002. The Tribunal considered previous decisions and the Supreme Court judgment in CCE, Bangalore v. Gammon Far Chems. Ltd., where it was held that clearances of a subsidiary company should be treated as done for the main company. As EAL was a subsidiary of CUL during the dispute period, the Tribunal upheld the clubbing of clearances, leading to the dismissal of the appeal.

Applicability of previous Tribunal decisions and Supreme Court judgment:
The Tribunal referenced Government Ceramic Service Centre v. CCE, Cochin and Final Order No. E/324/1998 in support of EAL's argument. However, the Tribunal relied on the Supreme Court's judgment in CCE, Bangalore v. Gammon Far Chems. Ltd., which supported the clubbing of clearances of subsidiary companies with their holding company. As EAL was a subsidiary of CUL during the relevant period, the Tribunal found no reason to interfere with the lower authorities' orders, ultimately dismissing the appeal.