2000 (5) TMI 758 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmation for goods manufactured by appellants and another manufacturer.
2. Denial of SSI exemption due to common premises and machinery lease.
3. Contention of separate units treated independently.
4. Allegation of clandestine removal and suppression.
5. Clubbing clearances and imposition of penalty.
6. Separate clearances for M/s. FFPL and appellants.
7. Legality of impugned order and notice to M/s. FFPL.
8. Suppression of facts and invocation of larger period.
9. Approval of RT-12 returns and separate Registration certificates.
10. Commissioner's treatment of M/s. FFPL as hired labour.
11. Relationship between appellants and M/s. FFPL.
12. Justification for setting aside the impugned order.

Analysis:
The appeal concerns the confirmation of duty demand for goods manufactured by the appellants and another manufacturer, FFPL, due to common premises and machinery lease, denying the SSI exemption. The appellants argue for treating both units independently, emphasizing separate RT-12 returns and registration certificates. They assert that FFPL's manufacturing was not as hired labor but on a principle-to-principle basis, supported by detailed contracts. The Commissioner accepted separate manufacture by FFPL but clubbed clearances based on the hired labor premise, leading to duty demands and penalty imposition under Rule 173Q.

The appellants highlight evidence like approved RT-12 returns and layout plans, showing separate premises for both units. They argue against suppression, suggesting denial of notification benefits without confirming FFPL's clearances on them. The Department's view is that FFPL, treated as hired labor, doesn't need separate notice, considering the appellants as sole manufacturers. The Commissioner's findings support this stance, invoking a larger period due to alleged suppression.

Upon careful consideration, the Tribunal notes separate registration certificates and approved RT-12 returns for both units, indicating independent manufacturing. The contract between the appellants and FFPL reveals a principle-to-principle relationship, not hired labor. The absence of notice to FFPL renders the impugned order unsustainable, with no suppression evident. Separate registration certificates and shared machinery knowledge further support the appellants' position. The Tribunal sets aside the impugned order on both merit and limitation grounds, emphasizing the justified need for notice to FFPL and lack of suppression in the case.