2017 (10) TMI 116 - AT - Central Excise

SSI exemption - clubbing of clearances - Revenue entertained a view that the two units owned by the two brothers are one and the same - Held that - It is well settled law that the two units belonging to two different relations, complete by themselves and independently registered with the tax authorities, cannot be termed to be one and the same units and clearances of the two cannot be clubbed - the appellate authority extended the benefit to the respondents on the ground that both are independent units duly registered independently with the Central Excise department as well as also there is no allegation or evidence of any joint financial inter-tuning between the two. The Revenue in their memo of appeal have not rebutted the said finding of the Commissioner (Appeals) by production of any positive evidence - benefit remains allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Jurisdictional service of notice.
2. Clubbing of clearances of two units.
3. Allegations of suppression of facts.
4. Benefit extended to respondents by appellate authority.
5. Rebuttal of findings by Revenue.

Jurisdictional service of notice:
The Revenue filed an appeal against the impugned order, but the respondents were not present as the notice could not be served upon them. Despite multiple opportunities, the notice could not be served as per the communication from the respondents' jurisdictional Central Excise Officer.

Clubbing of clearances of two units:
The case involved two units owned by two brothers engaged in manufacturing Lub. Oil pumps. The Revenue conducted searches and alleged that the two units were one and the same, leading to the initiation of proceedings resulting in duty demand and penalty imposition. The Commissioner (Appeals) set aside the order, highlighting the separate nature of the units, their independent registration, and lack of evidence of joint financial inter-tuning. The appellate authority dismissed the appeal, emphasizing that independently registered units cannot be considered the same without evidence to the contrary.

Allegations of suppression of facts:
The Commissioner (Appeals) noted specific allegations of suppression of facts based on statements that were retracted during cross-examination. However, it was concluded that the two units were separate and independent entities, each registered with the Central Excise department and other authorities. There was no evidence of financial intermingling between the units, leading to the setting aside of the duty demand and penalties imposed.

Benefit extended to respondents by appellate authority:
The appellate authority extended the benefit to the respondents based on the independent registration of both units with the tax authorities and the absence of evidence indicating joint financial activities between the two entities. The appellate authority emphasized that independently registered units belonging to different relations cannot be considered the same, and their clearances should not be clubbed.

Rebuttal of findings by Revenue:
The Revenue, in their appeal, did not provide positive evidence to counter the findings of the Commissioner (Appeals) regarding the separate nature of the two units and the lack of financial inter-tuning between them. Without any evidence contradicting the appellate authority's findings, the appeal was dismissed, upholding the decision that the two units were independent and should not have their clearances clubbed.