2007 (6) TMI 4 - SC - Central Excise

SSI Exemption Appellant company (LLFL) demanded for SSI Exemption by declaring that the other unit (BBPL) is its holding company Department contended that it doesn t claim at the time of SCN Held that appellant not entitle for SSI Exemption

Summary

Issues:
Challenge to the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal regarding the availability of exemption under Notification Nos. 175/86 and 1/93.

Detailed Analysis:

1. Background Facts and Allegations:
The appellant alleged that M/s. Brindavan Beverages Pvt. Ltd. availed SSI exemption fraudulently in conspiracy with other entities by misstatement and suppression of facts, leading to demandable central excise duty amounting to Rs. 39,51,028 for a specific period. The investigations revealed deliberate fragmentation of manufacture to avail SSI exemption, questioning the eligibility for exemption under Notifications 175/86 and 1/93.

2. Proceedings and Appeals:
After the noticees submitted their replies, proceedings were initiated based on the show cause notice. Subsequently, the Revenue preferred appeals before the CEGAT challenging the Commissioner's order dropping the proceedings.

3. CEGAT's Decision:
The CEGAT held that the Commissioner's order did not have any infirmity, dismissing the Revenue's appeals. It was contended that there was no evidence to support the existence of the brand name "Bisleri Club Soda" as registered by the Trade Mark Authorities.

4. Corporate Veil and Ownership Dispute:
The appellant argued that there was a need to lift the corporate veil to determine the real owner of the brand name, emphasizing that the decision-making power did not lie with the respondents. Allegations were made regarding the creation of dummy concerns to avail benefits under the Notifications.

5. Absence of Specific Allegations:
The respondents contended that there was no material indicating their involvement in the alleged arrangements. The show cause notice lacked specific details regarding the role of the respondents, and no evidence was presented to establish their participation in the alleged fraudulent activities.

6. Insufficient Evidence and Lack of Specificity:
The Court observed that the show cause notice lacked specificity and failed to provide sufficient details or evidence to implicate the respondents in the alleged fraudulent schemes. Without concrete material to substantiate the allegations, the conclusions of the Commissioner and the CEGAT were upheld.

7. Final Decision:
Based on the facts presented and the absence of substantial evidence implicating the respondents, the Court found no grounds for interference in the appeals. Consequently, the appeals were dismissed, and no costs were awarded.

In conclusion, the judgment upheld the decision of the Commissioner and the CEGAT, emphasizing the importance of specific allegations and concrete evidence in establishing liability in excise duty matters. The case highlighted the significance of transparency and clarity in legal proceedings to ensure fair treatment of the parties involved.