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TMI Blog1987 (4) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... ion but that part of the production was falsely shown to be that of M/s Diamond Engineering and Trading Corporation in order to avail benefit of exemption notification for each of them. Both appellants replied denying the said charges. On adjudication the Additional Collector of Central Excise, Chandigarh, under his order dated 22-1-1982 held the charges established. He, therefore, demanded from both, under Rule 9-A(5) of the Central Excise Rules, duty on excess value of clearances of Rs. 85,459.23P and further imposed on each of the appellants a penalty of Rs. 25,000/-. On appeal the Central Board of Excise and Customs under order dated 13-7-1982, upheld the finding of fact of the Additional Collector that the two units were in reality one only, run by Shri D.D. Malhotra. But the Board further that the extended period of limitation would not be available for demanding duty and hence the duty demand which extended to a period beyond the normal 6 months period cannot be upheld. The penalty on each of the appellants was reduced to Rs. 10000/-. It is against the said order that these two appeals have been preferred. Since common questions of fact and law arise for determination in bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s." It is these grounds that were urged before us also for confirming the findings of the lower authorities on the said questions of fact. 4. It appears to us, on a careful consideration of the allegations made in the show cause notice and the evidence relied upon by the lower authorities for the conclusion as above, that the said conclusions are incorrect. As observed in paragraph 22 of the order of the Board (as also in the order of the Additional Collector) the two units are legally separate entities, one being a sole proprietory concern (M/s Navyug Engineering and Trading Corporation), the other being a partnership concern (M/s Diamond Engineering Trading Corporation). The two held separate Central Excise licence, though the licence of M/s Diamond Engineering and Trading Corporation appears to have been surrendered at a later stage, evidently on the ground that their clearances were within the exemption limits and hence no licence was required. Shri D.D. Malhotra of M/s Navyug Engineering and Trading Corporation (NETC in short) has mentioned in his statement dated 1-8-1980 that he had not surrendered his licence as he intended to expand his business, though, according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper book is a copy of any statement recorded on 8-5-1980 by the Officers from Shri D.D. Malhotra. We note that in this statement dated 8-5-1980 (as found in the copy in the paper book), Shri D.D. Malhotra has stated that the affairs of DETC are being looked after by one Shri B.B. Khanna. It is this B.B. Khanna who has given a statement on 2-8-1980 confirming that he was looking after the affairs of DETC. Therefore, it appears to us that the Additional Collector as well as Central Board were not correct in concluding that Shri D.D. Malhotra, was looking after the affairs of both the firms. We may note that in the show cause notice (in para 3 thereof) there is a reference to the officers recording a statement from Shri D.D. Malhotra on the day after the first visit on 8-5-1980 i.e. evidently on 9-5-1980. No copy of any statement of Shri D.D. Malhotra dated 9-5-1980 has been produced. We are not quite sure whether it is this statement that is found in the paper book though dated 8-5-1980. 6. The Additional Collector as well as the Central Board have placed strong reliance on their finding that during the relevant period DETC had no machinery at all, though they owned a room opposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hashi Bhushan on 8-5-1980. The subsequent allegation in the show cause notice was that the signatures of B.B. Khanna on the Bills and invoices of DETC appear to be that of Shri D.D. Malhotra. Except making such a bald allegation to the said effect no material had been disclosed in the show cause notice to support the said allegation. It is not disclosed in the show cause notice as to who was the person who compared the signatures and arrived at the said opinion. This allegation had also been denied in the replies to the show cause notice and such denial reiterated during adjudication. But yet, without disclosing the reasons for such an opinion, and without disclosing as to who was the person who formed the said opinion, the order of the Additional Collector proceeds on the basis as if the said allegation had been proved. It is this conclusion that has been accepted by the Board also. In the absence of any material to support the said allegation the conclusion that the allegation was proved cannot be accepted. 8. Another circumstance that appears to have been relied on by the lower authorities was that certain sales by DETC were of material manufactured by NETC under their brand n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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