2024 (5) TMI 990 - AT - Central Excise

Wrongful availment of benefit of SSI exemption - clubbing of clearances - commonality of the directors and financial dealings between them - HELD THAT - The very same issue has been decided in favour of the appellant by this Bench of the Tribunal in NOBLE CHLOROCHEM PVT. LTD., NOBLE ALCHEM PVT. LTD., SHRI KAILASH CHAND GUPTA, DIRECTOR, SHRI SURESH CHAND GUPTA, DIRECTOR VERSUS CCE ST, ROHTAK 2020 (7) TMI 291 - CESTAT CHANDIGARH on the show cause notice issued for the period 2006 to 2012, wherein the Tribunal has held 'As per the CBEC Circular No.6/92 dated 29.5.1992, the Board has clarified that private limited companies are treated as separate, therefore, we have no hesitation to hold that both the units are separate units.' T he impugned order is not sustainable and requires to be set aside - Appeal allowed.

Summary

Issues involved:
The issue involves the appellant challenging the order passed by the Commissioner of Central Excise (Appeals-I), New Delhi, regarding the clubbing of clearances of the appellant and M/s Noble Alchem Private Limited to wrongly avail the benefit of SSI exemption during a specific period.

Summary:

1. Background and Facts:
The appellant, M/s Noble Chlorochem Private Limited, established their unit for manufacturing Potassium Silicate in 1987 and later started producing Aluminium Chloride in 1993. Following a dispute with the State Pollution Control Board, the appellant switched to producing Potassium Titanate in 2001. The appellant availed SSI exemption upon crossing the exemption limit and was registered in 2011. The Department alleged that the appellant and M/s Noble Alchem Private Limited were one entity to wrongly claim SSI exemption from 2006 to 2012.

2. Previous Tribunal Decision:
The appellant's counsel argued that a previous Tribunal decision had already established that the appellant and M/s Noble Alchem Private Limited were separate entities, despite common directors and financial dealings. The Tribunal had ruled in favor of the appellant in a similar case for the period 2006 to 2012.

3. Contentions:
The appellant's counsel reiterated the previous Tribunal decision, while the Revenue's Authorized Representative supported the findings of the impugned order.

4. Tribunal's Decision:
After hearing both sides and examining the case records, the Tribunal noted the previous decision in favor of the appellant. The Tribunal emphasized various factors such as separate operations, accounts, workforce, and statutory declarations to conclude that the clearances of the appellant and M/s Noble Alchem Private Limited cannot be clubbed. Consequently, the impugned order was deemed unsustainable, and the appeals were allowed with consequential relief as per law.

Therefore, the Tribunal set aside the impugned order, ruling in favor of the appellant based on the established separation between the appellant and M/s Noble Alchem Private Limited.