1989 (11) TMI 184 - AT - Central Excise

Summary

Issues Involved:
1. Clubbing of manufacture and clearances by three entities for assessment.
2. Time-barred demand.
3. Classification of monoblocs as part of electric motors.

Summary:

1. Clubbing of Manufacture and Clearances:
The primary issue was whether the manufacture and clearances by M/s. Priya Corporation, M/s. Premier Corporation, and M/s. Premier Agro Corporation could be clubbed for assessment purposes. The Department argued that M/s. Premier Corporation and M/s. Premier Agro Corporation were benami units created to avail exemptions u/s Notification Nos. 71/78, 80/80, 111/78, and 2/81-CE. The Additional Collector concluded that the actual manufacturing activities took place at M/s. Priya Corporation, and the other two units were used merely for invoicing to claim exemptions. The Tribunal upheld this finding, noting that the entire management and control were under Shri P.V. Jagadesan, and the machinery required for manufacturing was only available at M/s. Priya Corporation. The Tribunal rejected the appellant's argument that separate registrations and premises indicated independent entities, citing that the overall evidence suggested otherwise.

2. Time-Barred Demand:
The second issue was whether the demand raised was time-barred. The appellant argued that the demand for the period 1979-80, 1980-81, and 1981-82 was time-barred as there was no allegation of clandestine removal in the show cause notice. The Tribunal, however, agreed with the Department that there was suppression of facts, as the true nature of the manufacturing activities was not disclosed. Therefore, the invocation of the larger period of limitation was justified.

3. Classification of Monoblocs:
The third issue regarding the classification of monoblocs as part of electric motors was not considered by the Tribunal as it was neither raised before the adjudicating authority nor in the Memorandum of Appeal.

Conclusion:
The Tribunal upheld the impugned order, confirming the demand of Rs. 1,68,083.77 and the penalty of Rs. 25,000/- on M/s. Priya Corporation. The appeal was dismissed, affirming that the other two units were created to wrongfully avail exemptions by fragmenting the main unit, and the larger period for raising the demand was applicable due to suppression of facts.