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2015 (9) TMI 1493 - SC - Central ExciseSSI exemption - clubbing of clearances of subsidiary unit - Held that - this Court, in Commissioner of Central Excise, New Delhi v. Modi Alkalies & Chemicals Ltd. & Ors. 2004 (8) TMI 108 - SUPREME COURT OF INDIA has held that this very circular would have no relevance to notifications other than the Notification mentioned therein. This judgment was followed in Parle Bisleri Private Limited v. Commissioner of Customs and Central Excise, Ahmedabad 2010 (12) TMI 26 - Supreme Court of India . It is clear, therefore, that the sole basis on which the CESTAT has decided the issue of clubbing is bad in law. Equally, on the issue of suppression of material facts leading to the extended period of limitation being applicable to the first of the six Show Cause Notices, the CESTAT is equally cursory, relying upon one letter dated 20.07.1998 sent by the subsidiary company in which nothing is stated from which it can be said that there is suppression or otherwise of facts except the fact that M/s. Margo Bio Controls (P) Ltd. happens to be a 100 per cent subsidiary of the holding company viz., M/s. P.J. Margo (P) Ltd. This case should be remanded to the CESTAT to decide afresh as to whether any case for clubbing of excisable goods manufactured by the holding company and the subsidiary company is or is not made out on facts. Equally, the issue as to whether or not there has been suppression of material facts by both the aforesaid companies is also sent back for a re-determination on facts - appeal allowed by way of remand.
Issues: Appeal arising from Order-in-Original dated 12.10.2004 passed by the Commissioner of Central Excise involving clubbing of excisable goods manufactured by holding and subsidiary companies, and suppression of material facts leading to extended period of limitation.
Analysis: 1. The appeal involved several Show Cause Notices covering different periods, challenging the Order-in-Original dated 12.10.2004 by the Commissioner of Central Excise. The key issues revolved around whether a subsidiary company should be considered a dummy of the holding company for clubbing excisable goods, affecting the applicability of Notification No. 7/97. 2. The appellant contended that the CESTAT did not adequately address the issue of clubbing excisable goods from both companies, which would impact the exemption under Notification No. 7/97. Additionally, the ground of suppression of material facts by both companies was raised, emphasizing the need for a detailed examination. 3. On the other hand, the respondents argued that the grounds presented by the Commissioner were based on the Show Cause Notice without proper consideration of the detailed replies provided by the companies. The lack of thorough analysis by the CESTAT was highlighted in determining whether the excisable goods should be clubbed together. 4. The Supreme Court observed that the CESTAT's decision lacked a satisfactory analysis of whether the excisable goods manufactured by the holding and subsidiary companies should be combined. The Court noted that the CESTAT's reliance on a circular dated 29.05.1992 was misplaced as it did not pertain to Notification No. 7/97, rendering the basis for the decision flawed. 5. Referring to previous judgments, the Court emphasized that the circular in question had no relevance to notifications other than the specific one mentioned. The Court also found the CESTAT's assessment on the suppression of material facts to be superficial, primarily relying on a single letter without substantial evidence of suppression. 6. Consequently, the Court decided to remand the case to the CESTAT for a fresh determination on whether the clubbing of excisable goods and the suppression of material facts were substantiated. The CESTAT was directed to expedite the decision within six months from the date of the order due to the age of the matter. 7. In conclusion, the appeal was disposed of with the directive for the CESTAT to re-examine the issues of clubbing excisable goods and suppression of material facts, ensuring a thorough evaluation based on the facts presented in the case.
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