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2017 (3) TMI 917 - AT - Central ExciseSSI exemption - clubbing of clearances - demand of duty from all units simultaneously on same issue - clandestine removal - Held that - In respect of demand of differential duty on clubbing of clearances, Revenue has jointly demand duty from M/s. Punjab General Manufacturing Works, Mathura, M/s. Ashoka General Industries, M/s. Elite Metal Products, M/s. Karam Sanitations, M/s. Shreya Sanitations, M/s. Ellkay Sanitations and M/s. Goldline Bath Fixtures Pvt. Ltd. - the finding of this Tribunal in the said case of C.C.E., Chandigarh vs. Shiva Exim Enterprises 2005 (2) TMI 294 - CESTAT, NEW DELHI is squarely applicable in the present case, where it was held that the duty can be only demanded from the principal unit and not from both the units and that Where the duty has been demanded from both the units, it would rather lead to an inference that the Revenue has recognized implicitly both of them as independent units - the said part of the SCN is not sustainable. In so far as it relates to demand of differential duty of ₹ 1,44,96,923/. We did not find any ground forwarded by Revenue to negate such holding by the Original Authority in respect of allegation of clandestine clearance - appeal filed by the Revenue dismissed. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Clubbing of clearances for SSI exemption. 2. Allegations of clandestine removal of goods and evasion of Central Excise duty. Issue-wise Detailed Analysis: 1. Clubbing of Clearances for SSI Exemption: The appellants were engaged in manufacturing sanitary/bathroom fittings under various brand names. The Director General of Central Excise (Intelligence) investigated these manufacturers, suspecting misuse of SSI exemption under Notification No. 14/96. The investigation suggested that the clearances from different manufacturing units should be clubbed to determine eligibility for the exemption. The show cause notice alleged a differential duty of ?1,44,96,923/- due to ineligibility for the exemption. The manufacturers contended that clubbing of clearances was unwarranted as there were no allegations of any unit being a dummy or not undertaking manufacturing activities. They argued that their clearances did not exceed the threshold for SSI exemption and that the goods bearing other brand names should not be added to the aggregate value of clearances. The Original Authority confirmed the demand of ?1,44,96,923/- against seven manufacturers and imposed equal penalties, but the Tribunal found that the show cause notice was not sustainable. Referring to the case of Commissioner of Central Excise, Chandigarh vs. Shiv Exim Enterprises, the Tribunal held that duty could only be demanded from the principal unit, not jointly from all units. The Tribunal set aside the demand of ?1,44,96,923/-. 2. Allegations of Clandestine Removal of Goods: The show cause notice also alleged evasion of Central Excise duty amounting to ?1,04,34,642/- due to clandestine removal of goods. The manufacturers argued that the allegations were based on presumptions without concrete evidence of unaccounted production, non-duty paid goods, or receipt of unaccounted raw materials. The Original Authority dropped the demand of ?1,04,34,642/-, stating that there was no evidence to prove clandestine removal of goods or to identify the specific goods, companies, or quantities involved. The Tribunal upheld this decision, finding no grounds forwarded by Revenue to negate the Original Authority's holding. Conclusion: The Tribunal dismissed the appeal filed by the Revenue and set aside both demands in the show cause notice. Consequently, the personal penalties imposed on individuals were also set aside. The appellants were entitled to consequential relief. (Pronounced and dictated in the open court)
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