1996 (8) TMI 312 - AT - Central Excise

Summary

Issues:
1. Whether the three units can be treated as one unit.
2. Whether the extended period of limitation is applicable.

Analysis:
1. The judgment revolves around the issue of whether three separate units can be considered as one entity for the purpose of availing tax exemptions. The appellant argued that the units should be treated separately as they are registered under different names and there is no conclusive evidence to prove they are the same. However, the Department contended that the units function as one entity based on statements from involved individuals and operational practices. The Tribunal considered the evidence provided, including the fact that one individual manages the financial affairs of all three units, goods are transferred between units without charges, and electricity is shared without cost recovery. The Tribunal concluded that there is a common operational integrity between the units, especially with a common partner and shared financial resources, leading to the finding that the units are indeed one and the same entity.

2. The second issue addressed in the judgment is whether the extended period of limitation should be applied. The appellant argued against the invocation of the longer period, stating there was no willful suppression of information. However, the Tribunal found that the appellants had cleared goods as separate entities while operating as a single unit, indicating suppression of facts to evade duty payment. Despite upholding the duty demand, the Tribunal considered mitigating circumstances, such as one unit being closed and others declared as riot-hit units, and reduced the penalties imposed on the individuals and units. The Tribunal also allowed for the duty amount to be paid in installments, providing flexibility to the appellants in settling the dues.

Overall, the judgment emphasizes the importance of considering operational practices, shared resources, and common management in determining the unity of separate units for tax purposes. It also highlights the consequences of suppressing relevant information and the discretion available to authorities in imposing penalties and allowing for payment flexibility based on individual circumstances.