1993 (10) TMI 176 - AT - Central Excise

Summary

Issues Involved:
1. Sustainability of the impugned order on the question of law.
2. Clubbing of clearances of two units for levy of differential duty.
3. Mutuality of financial interest between the two units.
4. Applicability of small scale exemption Notification 175/86.
5. Consideration of evidence and case laws by the adjudicating authority.
6. Plea of limitation.

Summary:

1. Sustainability of the Impugned Order:
The Tribunal found that the impugned order was not sustainable on the question of law and based on well-settled decisions and evidence on record. Consequently, the appeals were taken up for disposal by granting a waiver of pre-deposit of duty and penalty.

2. Clubbing of Clearances:
The main issue was whether the clearances of Dharamdeep Properzi and Alloys Pvt. Ltd. and Nikhildeep Cables Pvt. Ltd. should be clubbed for the purpose of levying differential duty. The Tribunal noted that the turnover of both units was significantly above the exemption limits, making the applicability of Notification 175/86 irrelevant. The evidence indicated that both units operated independently with separate financial interests and manufacturing activities.

3. Mutuality of Financial Interest:
The Tribunal emphasized that mutuality of financial interest between the two units was a primary consideration. The evidence showed no common funding or financial flow back between the units. The financial transactions cited in the show cause notice occurred when both units were paying full duty rates, not availing the small scale exemption.

4. Applicability of Small Scale Exemption Notification 175/86:
The Tribunal found that the large turnover of both units made the applicability of Notification 175/86 insignificant. The units did not claim the small scale exemption and paid duty at the tariff rate, further supporting their independent operations.

5. Consideration of Evidence and Case Laws:
The Tribunal noted that the adjudicating authority failed to consider vital evidence and case laws presented by the appellants. The impugned order contained vague and general observations without addressing the specific evidence and legal precedents cited.

6. Plea of Limitation:
The Tribunal acknowledged the plea of limitation, considering the permission granted u/r 57F(2) for movement of inputs and the RT-12 assessment by authorities. Given the facts, the Tribunal found merit in the plea of limitation but did not delve into it further due to the clear evidence of independent existence and lack of mutuality between the units.

Conclusion:
The Tribunal set aside the impugned order, holding that the units were not operating as one entity and had no financial connections. The penalty was reduced to Rs. 500 for each unit, and the appeals were disposed of accordingly.