9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 259 - AT - Central ExciseSSI exemption - clubbing of clearances - dummy units - use of common brand name - Held that - SCN has raised separate demands against both the Respondents thus accepting the separate entity of both the firms. Clubbing of value clearance of the firms without disclosing which of the units is principal and which of the units is dummy is not sustainable as when the clearances are sought to be clubbed it has to be shown as which entity does not have separate existence and hence its clearances are to be clubbed to the clearances of principal unit. The SCN also alleged that since both the units are manufacturing goods with a common brand name (Gaylord), they are not entitled for the benefit of value based SSI exemption N/N. 8/2003-C dt 1.3.2003 - it is found that the name Gaylord is not a registered brand name of any of the units. Further none of the units has claimed the ownership on such name. In such case when the word Gaylord is part of their name, it cannot be said that the Respondents are manufacturing goods under a brand name of another person. Appeal dismissed - decided against Revenue.
Issues Involved:
1. Whether M/s Gaylord Engineers and M/s Gaylord Pharma Systems should be considered as a single entity for the purpose of central excise duty. 2. Whether the use of the brand name "GAYLORD" disqualifies the entities from availing the benefit of SSI exemption under Notification No. 8/2003. 3. Whether the financial transactions between the two entities indicate that they are not independent units. 4. Whether the shared resources and common office space justify the clubbing of the two entities for excise duty purposes. Issue-wise Detailed Analysis: 1. Single Entity Consideration: The Revenue argued that M/s Gaylord Engineers and M/s Gaylord Pharma Systems should be treated as a single entity due to shared resources, common office space, and financial transactions. The adjudicating authority confirmed the demands, but the Commissioner (Appeals) set aside the demands and penalties. The Tribunal found that the Show Cause Notice (SCN) raised separate demands against both entities, thus recognizing their separate existence. The Tribunal emphasized that clubbing of clearances requires clear identification of the principal and dummy units, which was not established in this case. The Tribunal relied on the Supreme Court's judgment in Gajanan Fabric Distributors Vs C.C. Pune, which necessitates clear indication of how demands are calculated and the basis for considering multiple units as a single entity. 2. Use of Brand Name "GAYLORD": The Revenue contended that the use of the brand name "GAYLORD" disqualifies the entities from SSI exemption under Notification No. 8/2003. However, the Tribunal found that "GAYLORD" is not a registered brand name and is part of the entities' names. Since neither unit claimed ownership of the name, it cannot be considered a brand name of another person. The Tribunal referred to the case of Pethe Breake Motors Ltd. Vs. Commissioner of Central Excise, Pune, where the use of a family name as a mark did not disqualify the entity from SSI exemption. 3. Financial Transactions: The Revenue highlighted financial transactions between the two entities as evidence of their non-independence. The Tribunal noted that there were only a few instances of reciprocal fund transfers recorded in the entities' ledgers. These transactions were properly recorded and did not indicate a lack of independence. The Tribunal concluded that such occasional financial assistance does not justify clubbing the entities for excise duty purposes. 4. Shared Resources and Common Office Space: The Revenue argued that shared resources and a common office space indicate that the entities are not independent. The Tribunal found that one entity was a proprietorship and the other a partnership, and the term "corporate office" was incorrectly used as neither entity was a registered company. The Tribunal noted that shared office space and some amenities do not automatically lead to clubbing of units. The Tribunal also found no evidence that the administrative functions of M/s Gaylord Pharma Systems were managed by the proprietor of M/s Gaylord Engineers. The Tribunal emphasized that both entities had separate manufacturing facilities and independent registrations with various authorities. Conclusion: The Tribunal upheld the order of the Commissioner (Appeals) and rejected the Revenue's appeals. It concluded that the entities were separate and independent, the use of the name "GAYLORD" did not disqualify them from SSI exemption, occasional financial transactions did not indicate a lack of independence, and shared resources and office space were insufficient grounds for clubbing the entities for excise duty purposes. The Tribunal's decision was based on legal precedents and a thorough examination of the facts and evidence presented.
|
