2010 (5) TMI 163 - HC - Central Excise

Scope of show cause notice (SCN) impact of corrigendum to the SCN SSI units clubbing of clearance - decision by the tribunal beyond show cause notice - in pursuance of the show cause notice, the department issued a corrigendum dated 29.9.1999 for clubbing the clearance of the goods of both the indicated firms and accordingly, the Adjudicating Authority, having clubbed the clearance of the goods, confirmed the part of demand of duty. The Commissioner (Appeals) observed that the order of clubbing was not proper and enhanced the demand of duty and amount of penalty. The Appellate Tribunal restored the order of the Adjudicating Authority in this relevant direction. The assessee has already paid the amount of duty and penalty as confirmed by the Adjudicating Authority. Held that - the corrigendum dated 29.9.1999 issued by the Superintendent (Adjudication) was valid and the Adjudicating Authority has rightly clubbed the clearance of goods of both the assessee s firms as well as M/s Prominent Engineering Works, for the purpose of levy of duty, which was correctly confirmed by the Appellate Tribunal

Issues:
1. Clubbing of clearance of goods for levy of duty based on common brand name.
2. Validity of corrigendum issued by Superintendent (Adjudication).
3. Jurisdiction of Superintendent to issue corrigendum.
4. Interdependence criteria for clubbing clearances of firms.
5. Common partners and management in firms manufacturing goods under the same brand.

Issue 1: Clubbing of clearance of goods for levy of duty based on common brand name:
The case involved two firms, both manufacturing goods under the brand name "Dominant." The Adjudicating Authority initially confirmed a partial demand of duty, which was later enhanced by the Commissioner (Appeals) and further by the Appellate Tribunal. The main contention was whether the clearance of goods by both firms should be clubbed for levy of duty. The court upheld the decision to club the clearances, considering the common partners, family relations, and common brand name, affirming the Tribunal's decision.

Issue 2: Validity of corrigendum issued by Superintendent (Adjudication):
A corrigendum dated 29.9.1999 was issued by the Superintendent (Adjudication) for clubbing the clearance of goods of both firms. The validity of this corrigendum was challenged by the revenue. The court held that the corrigendum was valid, as the Superintendent had the jurisdiction to issue such notices, citing relevant legal precedents.

Issue 3: Jurisdiction of Superintendent to issue corrigendum:
The court clarified that the Superintendent had the authority to issue the corrigendum, as established by previous legal judgments. The argument that the Superintendent lacked competence to issue the corrigendum was deemed untenable.

Issue 4: Interdependence criteria for clubbing clearances of firms:
Referring to the Modi Alkalies & Chemicals Ltd. case, the court highlighted the criteria for clubbing clearances of firms, emphasizing pervasive financial and management control as indicators of interdependence. In this case, the common partners, family relations, and shared manufacturing facilities justified the clubbing of clearances.

Issue 5: Common partners and management in firms manufacturing goods under the same brand:
The court noted that both firms had common partners, belonging to the same family, with shared management, accounts, and manufacturing facilities. This commonality justified the clubbing of clearances under the same brand name. The court dismissed the appeal, upholding the decisions of the Adjudicating Authority and the Appellate Tribunal.

In conclusion, the court dismissed the appeal, affirming the validity of the corrigendum, the clubbing of clearances for levy of duty, and the interdependence criteria for firms sharing common brand names and management structures.

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