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2007 (8) TMI 286 - AT - Central ExciseSSI exemption two units run by husband and wife - there is no intertwining of finances between the two units - Merely because husband is looking after the unit of his wife or broken common wall between the two units or having some of the common staff, it cannot be held that one unit is dummy unit- two units having their own finances, machinery to manufacture the goods demand and penalty not sustainable
Issues:
Clubbing of clearances of two units M/s. Tightwell Fastners and M/s. Nitin Steels. Analysis: The Revenue appealed against the order passed by the Commissioner (Appeals) regarding the clubbing of clearances of two units, M/s. Tightwell Fastners and M/s. Nitin Steels. The Revenue argued for clubbing the clearances due to the proximity of the units, common staff, and shared ownership by a husband and wife. However, the Tribunal noted that only one appeal was filed against M/s. Tightwell Fastners, and no appeal was made against M/s. Nitin Steels. As the order concerning M/s. Nitin Steels was not challenged, it became final. Citing the case of M/s. Elemec Industries v. CCE, Pune, the Tribunal emphasized that clearances of M/s. Nitin Steels cannot be clubbed with those of M/s. Tightwell Fastners, thereby weakening the Revenue's case. The Tribunal further examined the circumstances and found that the Commissioner (Appeals) correctly determined that there was no intertwining of finances between the two units operated by the husband and wife. Merely sharing common staff or the husband overseeing the wife's unit did not establish the two units as one entity, especially when M/s. Nitin Steels was not deemed a dummy unit by the original Adjudicating Authority. The Tribunal referenced previous decisions indicating that clubbing of production of two units is only permissible if one unit is a dummy of the other, which was not the case here. Additionally, the Asst. Commissioner's observation that M/s. Nitin Steels was not a dummy of the respondent supported the assessee's position. Citing the Tribunal's decision in the case of M/s. K.E. Burgmann Fiber India Pvt. Ltd., the Tribunal upheld the Commissioner (Appeals)'s decision, finding no error in their judgment, and consequently rejected the Revenue's appeals. The cross-objection was also disposed of accordingly.
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