2004 (3) TMI 710 - AT - Central Excise

Summary

Issues:
1. Appeal against the order of the Commissioner (Appeals) regarding clubbing of turnover.
2. Allegation of suppression of production by one firm leading to duty evasion.

Analysis:
Issue 1: The appeals were filed by the Revenue against the order of the Commissioner (Appeals) who set aside the order of the lower authority. The case involved M/s. Paras Plastics, a Central Excise registrant, and Suyog Corporation, a trading firm operating in the same premises. The Revenue contended that the trading activity of Suyog Corporation was, in fact, a manufacturing activity carried out by M/s. Paras Plastics, leading to duty evasion. The Commissioner (Appeals) held that there was no mutuality of interest between the two firms, and thus, their turnovers could not be clubbed. The Tribunal upheld this decision, emphasizing that the evidence did not establish that Suyog Corporation was engaged in manufacturing activity. The Tribunal also noted that the mere fact that both firms operated from the same premises did not automatically imply that they were both involved in manufacturing.

Issue 2: The Revenue alleged that M/s. Paras Plastics suppressed its production, leading to duty evasion. However, the Tribunal observed that if the Revenue had concerns about trading activity being conducted from the same premises where manufacturing took place, action should have been taken against M/s. Paras Plastics for allowing such trading without permission. The Tribunal rejected the appeals, upholding the order of the Commissioner (Appeals) and emphasizing that the Revenue failed to establish that Suyog Corporation was engaged in manufacturing activity.