9911796707
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Issues:
1. Allegations of contravention of Central Excise Act, 1944 and Rules. 2. Clubbing of clearances of two separate units for excise purposes. 3. Determination of duty and penalty based on alleged violations. Analysis: The judgment pertains to an appeal filed against an Order-in-Original by the Collector of Central Excise, Chandigarh, demanding duty and imposing a penalty on the appellants for various violations. The appellants, manufacturers of knitting machines and equipments, were accused of contravening the Central Excise Act by clearing excisable goods without obtaining a license, non-payment of duty, and other procedural violations. The Collector found that the two units operated by the appellants, namely M/s. Raj Mechanical Industries and M/s. Raj Machines, shared common facilities and interests, leading to the conclusion that they were one entity for excise purposes. Duty was demanded for specific years, and the exact amount for one year was to be determined later. The appellants contested the allegations, arguing that the two units were separate legal entities registered independently with the government, each having distinct operations and financial structures. They emphasized the lack of financial ties between the units and disputed the Collector's findings based on shared premises and common workers. The appellants also claimed a genuine belief in their exemption from excise duty as a Small Scale Industry (SSI) unit, supported by certificates issued by Central Excise officers. In response, the Department contended that the units were effectively a single entity due to shared ownership, products, premises, and resources. They highlighted the failure to submit required declarations and asserted that the Collector's findings were valid, justifying the duty demand and penalty. Upon review, the Tribunal considered the legal position regarding the treatment of separate units as a single manufacturer. It emphasized that close relationships and shared facilities alone are insufficient grounds for clubbing clearances unless there is conclusive evidence of financial flow between the units. Citing a previous case, the Tribunal held that without such evidence, clearances of units with no proprietary interest in each other should not be clubbed. As there was no proof of financial flow between the appellants and M/s. Raj Machines, the Tribunal allowed the appeal, setting aside the impugned order. In conclusion, the Tribunal ruled in favor of the appellants, emphasizing the importance of conclusive evidence of financial transactions to justify clubbing clearances of separate legal entities for excise purposes.
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