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TMI Blog1986 (12) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same premises. The first firm had four partners namely Shri Shiv Narain Anand S/o Shri Nira Nand Anand, Shri Hari Krishan Anand S/o Shri Shiv Narain Anand, Smt. Motia Rani Anand W/o Shri Shiv Narain Anand and Smt. Prabha Rani Anand W/o Shri Hari Krishan Anand. The second firm had two partners namely Shri Shiv Narain Anand S/o Shri Hiranand Anand and Shri Hari Krishan Anand S/o Shri Shiv Narain Anand, they being also the Partners in M/s. Sarang Products aforementioned. It followed therefrom that two partners who were father and son, were common in both the firms and the other two partners in the first firm were their wives. They stated that they manufactured the aforesaid products exclusively for M/s. Bajaj Electricals, Bombay and the entire goods were sold by M/s. Bajaj Electricals Ltd. only. The said goods i.e. Auto Standard Electric Iron was supplied at a very low price by the party to M/s. Bajaj Electricals Ltd., i.e. @ Rs. 61.60 per unit during 30-4-1980 to 30-9-1980 and @ Rs. 66.60 per unit during 1-10-1980 to 31-3-1981 in comparison to the said goods resold by M/s. Bajaj Electricals Ltd., to the buyers in the wholesale trade i.e. @ Rs. 142.00 and Rs. 144.40 (after all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 5% of basic duty were ascertained as Rs. 4,71,992.33 and Rs. 23,599.61 respectively. The said goods were alleged to have been cleared in contravention of Rules 174,9,52-A, 173-G read with Rule 173-Q of the Central Excise Rules inasmuch as the said goods were manufactured without having Central Excise Licence and were cleared without the cover of gate passes and without payment of appropriate Central Excise duty due on the said goods, in a manner otherwise than as provided under Central Excise Rules, 1944. The Assistant Collector of Central Excise issued a show cause notice dated 14-10-1981 to M/s. Sarang Products requiring them to show cause as to why the duty amounting to Rs. 4,71,992.33 (basic) plus Rs. 23,599.61 (special) should not be demanded from them under Rule 9(2) and as to why penalty under Rule 173-Q of Central Excise Rules, 1944 should not be imposed upon them for contravention of Central Excise Rules, mentioned in the notice. In reply to the said show cause notice the appellant replied that the show cause notice was illegal and M/s. Sarang Products and M/s. Gaurav Products were two independent units manufacturing the goods in different premises, with separate constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He had also imposed a penalty of Rs. 1 lakh on the appellant under Rule 173-Q of the Central Excise Rules, 1944. Being aggrieved from the aforesaid order the appellant has come in appeal before the Tribunal. 3. Shri J.J. Bhatt, Advocate with Shri K.C. Dua, Advocate has appeared on behalf of the appellants. He has reiterated the facts. He has argued that the issue on brand name stands concluded by various judgments of the Tribunal. He has referred to the show cause notice dated 14-10-1981 which appears on Page 56 of the paper book. He has referred to the order in original. He has also referred to the partnership deed of M/s. Gaurav Products which appears on Page 133 of the paper book. He has referred to the trading account of M/s. Gaurav Products which appears on Page 52 of the Paper Book. He has argued that M/s. Gaurav Products was buying goods from the market and assembling them and selling the same to M/s. Bajaj Electricals. In support of his arguments Shri Bhatt has referred to a judgment of the Tribunal in the case of G.D. Industrial Engineers, Faridabad v. Collector of Customs and Central Excise, Chandigarh reported in 1983 E.L.T. 1994 where the Tribunal had held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be placed on the statement of Shri Gurcharan Singh and Liakat Ali, who are hostile witnesses as they had taken part in the strike in the factory. He has referred to the attendance register in respect of Ramnath and Chandrapal - employees. Shri J.J. Bhatt has referred to the statement of Shri Shiv Narain, Partner and has stated that no adverse inference should be taken for the same. He has relied on the judgment of the Tribunal in the case of M/s. Polar Auto Engineering Industries Pvt. Ltd. v. Collector of Central Excise, Delhi vide order No. 328/1986-A, dated 28-4-1986. He has pleaded that the appellant had sold the goods to M/s. Bajaj Electricals and M/s. Gaurav Products had also sold the same directly. The appellant s case is fully covered by the judgment of the Supreme Court in the case of Union of India and Others v. Cibatul Limited reported in 1985 (22) E.L.T. 302 (SC). He has pleaded that M/s. Bajaj Electricals do not have any control over both the factories. M/s. Sarang Products and M/s. Gaurav Products are two separate entities and there is no question of clubbing the same. He has pleaded further that for the sake of argument even if the clubbing is upheld, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be affixed on these goods only which are found to conform to the specifications or standard stipulated by the buyer. All goods not approved by the buyer cannot bear those trademarks and are disposed of by the sellers without the advantage of those trade marks. The trade marks are affixed only after the goods have been approved by the buyer for sale by the seller to the buyer. The seller owns the plant and machinery, the raw material, employs the labour, manufactures the goods under the agreements and affixes the trade marks on the goods. The goods are manufactured by the seller on its own account and the seller sells the goods with the trade marks affixed on them to the buyer." 7. The Hon ble Supreme Court held that the wholesale price at which the seller company sells these goods to the buyer company is the assessable value under Section 4 of the Central Excises and Salt Act, 1944. This judgment has been followed by the Tribunal in the case of M/s. Polar Auto Engineering Industries Pvt. Ltd. v. Collector of Central Excise, Delhi vide order No. 328/86-A, dated 28-4-1986 in Appeal No. ED(SE)T. A.No. 80/76A. Accordingly, we hold that the Collector was not justified in taking the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he right when properly carrying on business to pledge the credit of the joint family to the extent of its assests, and not because the junior members become partners in the business. The liability of the latter arises by reason of their status as coparceners and not by reason of any contract of partnership by them." 8. In the present matter before us S/Shri Shiv Narain Anand and Hari Krishan Anand are partners with their wives in their capacity as karta of the Hindu Undivided Family in M/s. Sarang Products. In M/s. Gaurav Products both Shri Shiv Narain Anand and Shri Hari Krishan Anand are partners in their individual capacities. 9. The facts, circumstances and the evidence on record do not justify that both the firms should be treated as separate entities. We agree with the Collector that M/s. Gaurav Products existed merely on paper. It had no existence on the ground. It was said to be housed in a garage which was full of empty cartons and other miscellaneous articles. There were no tell-tale signs of any manufacturing activity having taken place there nor were any tools, work benches, power connection or testing equipment found therein with the help of which assembly of ele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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