2000 (1) TMI 277 - AT - Central Excise

Summary

Issues involved: Appeal against order-in-original regarding clubbing of clearances of two separate units owned by related persons.

Summary:
The revenue filed appeals against the order-in-original passed by the Additional Collector of Central Excise, contending that M/s. Standard Times Pvt. Ltd. and M/s. Standard Watch Co. Pvt. Ltd. should have their clearances clubbed as they are related entities. The case involved the issue of whether the two units, despite being related and situated in the same premises, should have their clearances combined.

The revenue argued that both units were essentially one entity as evidenced by a company supervisor working for both, combined stock registers, and common ownership by Shri S.K. Gupta. They claimed that due to these factors, the units should not benefit from small scale exemption.

In response, the counsel for the respondents emphasized that the units were separate legal entities with independent operations, separate ownership of premises, and distinct financial transactions. They cited a specific finding that there was no financial flow back between the units, supported by evidence of separate importations and payments for components.

After hearing both sides, the Tribunal upheld the impugned order, noting that the units were independent entities based on findings of separate premises, registrations, and financial transactions. Citing a precedent from the Hon'ble Rajasthan High Court, the Tribunal emphasized the lack of evidence of common funding or financial flow back as crucial in determining that the clearances of the two units should not be clubbed. Consequently, the appeals filed by the Revenue were rejected.