2018 (2) TMI 558 - AT - Central Excise

SSI Exemption - clubbing of clearances - Held that - it appears that M/s. Speed-O-Graph, M/s. Ganesh Engineering and M/s. Trimurthy Enterprises are independent entities and the Proprietors are different, their assessments are different and have permission to run their business at different places. The department has failed to examine the source of raw materials of these Companies. When assessments are different then their turn-over cannot be clubbed with the respondent-assessees - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against order-in-original regarding duty demand and penalty on manufacturing entities.

Analysis:
The appeal was filed against order-in-original No. 279-280/35-36/V/2006/Commr/RH dated 07.04.2006, which involved a search at the premises of the assessee engaged in manufacturing printing machines. The contention was whether a lathe machine found in the factory was manufactured by the respondent or another entity, M/s. Shree Ganesh Engineering. The department alleged that the goods were manufactured by the respondent to evade duty, citing control by a common individual and creation of entities for SSI exemption. The department sought to revoke the SSI exemption granted to the respondent.

During the proceedings, the department argued that the goods were manufactured by the respondent and marketed by another entity controlled by the same individual, aiming to evade duty. However, the advocate for the respondent contended that the entities involved were distinct legally and operationally, with different proprietors, premises, and assessments. The advocate highlighted that the respondent did not file any cross objection or appeal against the impugned order.

After hearing both parties and reviewing the records, the Tribunal found that the entities involved were separate legal entities with different proprietors, assessments, and business locations. The Tribunal noted the failure of the department to examine the source of raw materials for the companies in question. As the assessments were distinct, the turnover of the entities could not be combined with that of the respondent. Consequently, the Tribunal dismissed the department's appeals, stating that there was no valid reason to uphold the impugned order.

In conclusion, the Tribunal ruled in favor of the respondent, dismissing the department's appeals and maintaining the independence of the entities involved in the manufacturing and marketing of the goods in question.