2013 (11) TMI 689 - AT - Central Excise

SSI Exemption - Clubbing of the value of clearances - Whether value of clearances made by M/s. Parag Industries was required to be clubbed with the clearances made by the appellant Held that - The goods manufactured may be of different classification made by both the parties but the links between the two makes it clear that Parag Industries was a proprietorship concern of the assessee and both are integrally connected with each other - Because of such proprietary interest, operating result as well as assets and liabilities of both concerns were consolidated in the financial statement (Balance-sheet) of the appellant - Although they were located in different places within a radius of 1 k.m., accounts were maintained under the control of the appellant - the appellant had proprietary interest in Parag Industries clubbing of clearances was bound to occur - Revenue clearly proves its case establishing total concern, control, nexus and inseparable link between the assessee and its other proprietary concern viz., Parag Industries there was no contradiction to the material facts and evidence to which attention was drawn thus the clubbing of clearances sustained - Extended period of limitation Jurisdiction to issue Show cause Notice - Held that - The demand covered by all the four Show Cause Notice have been raised within six months only - there is no question of invoking extended period i.e. beyond the period of six months as contended by the assessee the show cause notice issued by the department sustainable in law - Nowhere is the Show Cause Notice suppression, fraud etc. has been alleged not the extended period under proviso to Section 11 A (1) has been invoked thus the Assistant Commissioner, has rightly adjudicated the Show Cause Notices as far as the point of jurisdiction is concerned the order is perfectly sustainable as far as the issue of jurisdiction is concerned Decided in favour of Revenue.

Summary

Issues: Clubbing of clearances made by two related entities for excise duty assessment

Analysis:
The main issue in this case was whether the clearances made by two entities, one being a proprietary concern of the other, should be clubbed for excise duty assessment. The appellate order dated 30.1.2005 was considered, where the Commissioner (Appeals) appreciated the show cause notice calling for adjudication on whether the clearances made by both entities should be clubbed. The Commissioner concluded that there should not be clubbing of clearances due to the lack of commonality of interest and differing end products between the two units. However, the Revenue argued that despite the different products, the links between the entities indicated a close connection, with consolidated financial statements and shared management control. The adjudicating authority held that the clearances should be clubbed, which was upheld by the Tribunal.

The Tribunal found that the appellate authority had based its decision on irrelevant considerations and failed to consider the material facts and evidence presented by the Revenue. It was noted that there was a clear nexus and inseparable link between the two entities, indicating total control and concern. The Tribunal agreed with the Revenue's argument and concluded that the clubbing of clearances was justified based on the evidence provided.

The Tribunal, after considering the arguments and evidence presented by the Revenue, upheld the decision of the adjudicating authority to club the clearances made by the two related entities. Consequently, the appellate order was set aside, and the adjudication was upheld, allowing the Revenue's appeal in this case.