2013 (12) TMI 1030 - AT - Central Excise

Clubbing of clearances of all the units - Dummy units created to avail benefit of SSI - Waiver of Pre-deposit Held that - The Panchnama specifically talks about the existence of all the units and having independent machinery - If that be so, the Revenue authorities should have issued notices to other two units also to show cause as to their units be not considered as dummy units COMMISSIONER OF CENTRAL EXCISE, JAIPUR Versus SETHIA FOODS 2002 (10) TMI 185 - CEGAT, COURT NO. IV, NEW DELHI - the entire case needs to be gone into detail, which can be done only at the time of final disposal of appeals - the amount of Rs.20 lakhs deposited by the main appellant is enough security as pre-deposit till the disposal stay granted.

Summary

Issues:
- Waiver of pre-deposit of duty, interest, and penalties
- Clubbing of clearances of multiple units
- Consideration of units as dummy units without individual show cause notices

Analysis:
The case involved Stay Petitions seeking waiver of pre-deposit of duty, interest, penalties, and personal penalties imposed on directors of a company. The duty liability was confirmed on the main appellant for allegedly creating dummy units to avail ineligible SSI benefits. The main issue was the clubbing of clearances of all three units without issuing show cause notices to the other two units to be considered as dummy units. The appellant argued that unless dummy units are issued show cause notices, the impugned order should be set aside, citing precedents. The appellant had deposited Rs.20 lakhs as security, which the adjudicating authority had appropriated. The Additional Commissioner argued that detailed findings showed the main appellant had created the companies and controlled operations, with goods stored in a single room.

Upon considering the submissions and records, the Tribunal found the key issue to be the clubbing of clearances and denial of SSI exemption to the main appellant. The Tribunal noted that the Panchnama mentioned the existence of all three units with independent machinery, indicating the need for show cause notices to the other units. Citing previous decisions, the Tribunal held that a detailed examination of the case was necessary at the final disposal of appeals. Accepting the appellant's submission, the Tribunal considered the Rs.20 lakhs deposited as sufficient security to hear and dispose of the appeals. Consequently, the applications for waiver of pre-deposit of the remaining amounts were allowed, and recovery was stayed until the appeals' disposal.