2018 (1) TMI 1128 - AT - Central Excise

SSI Exemption - clubbing of clearances - dummy units - grievance of Revenue is that the order passed by the Commissioner (Appeals) is not legal and proper, inasmuch as, the respondent No.3 was not a dummy unit of respondent No.1 and that the duty liability on the later has not been correctly computed by the adjudicating authority. Held that - the ld. Commissioner (Appeals) has elaborately discussed that Perfect Engineers, the Respondent No.3 was not a dummy unit of Supershine Laundry Systems Pvt. Ltd., the Respondent No.1 and has also held that except recording of the statement, no other corroborative documentary evidences were produced by the Department to support such stand - In view of the fact that the Department has not produced any corroborative documentary evidences, indicating financial flow back and mutuality of interest between the Respondent No.1 & 3, the above observations made by the Commissioner (Appeals) in the impugned order is proper and justified and cannot be interfered with at this juncture. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against the order passed by the Commissioner (Appeals)
- Determination of duty liability on the respondent
- Confiscation of laundry machines
- Imposition of penalty on the respondent

Analysis:
The appeal before the Appellate Tribunal CESTAT New Delhi was against the order passed by the Commissioner (Appeals) regarding the duty liability, confiscation of laundry machines, and penalty imposition on the respondent. The Revenue contended that the order passed by the Commissioner (Appeals) was not legal and proper as it held that the respondent was not a dummy unit and duty liability was not correctly computed. The Revenue also challenged the findings regarding the laundry machines not being liable for duty and confiscation, as well as the non-imposition of penalty on the respondent.

Upon hearing both sides and examining the case records, the Tribunal found that the Commissioner (Appeals) had extensively discussed and analyzed the evidence to conclude that the respondent was not a dummy unit of another entity. The Commissioner (Appeals) had considered various documentary evidences such as Income Tax Returns, Sales Tax Returns, and Bank Account records to support this finding. The Tribunal noted that no corroborative documentary evidence was produced by the Department to establish a financial flow back and mutuality of interest between the entities, thus upholding the Commissioner's findings.

Furthermore, the Tribunal upheld the Commissioner's decision to extend the benefit of trading goods based on documentary evidence and statements from relevant parties. The Commissioner had also confirmed the duty demand and set aside the confiscation of laundry machines seized from the respondent's premises, as the respondent was deemed an independent legal entity entitled to certain exemptions. Consequently, the Tribunal found that the detailed and reasoned order passed by the Commissioner (Appeals) should not be disturbed at that juncture, leading to the dismissal of the appeals filed by the Revenue.

In conclusion, the Tribunal upheld the Commissioner (Appeals)'s order, emphasizing the importance of detailed analysis and evidence-based decision-making in matters of duty liability, confiscation, and penalty imposition in such cases.