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TMI Blog2009 (10) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... d, records were seized and based on the records, the enquiry and investigation conducted as the follow up action, show cause notice was issued and the impugned order has been passed. As a result of investigation, it was revealed that (a) NAP had evaded Central Excise duty by mis declaring excisable goods as non-excisable goods in their sale document, (b) manufacturing and clearing of excisable goods in the name of two other companies namely M/s. Paramount Paper Products (PPP for short) and M/s. Rajdeep & Sons Pvt. Ltd. (RSPL for short) without disclosing to the Department, and (c) manufacturing and clearing of excisable goods on job work basis without paying any duty. 3. After issuance of show cause notice and adjudication process, impugned order has been passed whereby Central Excise duty of Rs. 57,65,155/- has been demanded from NAP, a penalty of Rs. 53 lakhs has been imposed under Rule 173Q(1), penalties of Rs. 50 lakhs each have been imposed under Rule 209A of the Central Excise Rules, 1994 upon Shri A.M. Joshi and Shri M.B. Shah, partners of NAP, penalties of Rs. 25 lakhs each have been imposed upon Mrs. H.A. Joshi and Mrs. N.H. Shah. 4. The learned Counsel Shri Prakash Shah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs (EP) v. Jupiter Exports reported in 2007 (213) E.L.T. 641 (Bom.) in support of his contention that if once penalty is imposed on the firm a separate penalty cannot be imposed on the partners. (viii) Further, he drew our attention to Annexure D1 and D2 of the show-cause notice and submitted that first six invoice numbers were the exact duplicate of each other. He submits that there is no evidence to show that suppliers were made against these duplicate invoices. He submits that this was a mistake, which happened at the time of preparation of invoices and there was only one supply in respect of each invoices. He submits that at the time, the purchaser had issued only one C-2 form for the purpose of Sales Tax. He submits that if their contention about duty demand is not accepted, duplicate invoices are required to be verified and suitable reduction in the value as well as differential is to be made. (ix) Another submission made by the learned Advocate was that the amount received by the appellant should have been treated as cum-duty value and if this is considered, there will be substantial reduction in total value of clearances (x) He also submits that whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly been disallowed by the Commissioner in view of the fact that it is not the claim of the appellant that the value included in the duty element. 6. We have considered the submissions made by both sides. 7.1 It is the submission of the appellants that in the absence of any evidence of financial flow back between one unit and another, clubbing could not have been done. In this case we find that financial flow back on the basis of 2-3 instances as rightly pointed out by the learned DR is only one of the supporting evidences for the conclusion that only NAP was in existence and PPP and RSPL were dummy units. From the facts it is quite clear that in the registration certificate issued to NAP on the basis of application filed by them, NAP was situated at 108, 230, 231 and 233 of Ghampaklal Industrial Estate. While the duty demand relates to 1994-1995 and 1995-1996, the manufacturing activity in premises no. 231 was discontinued on 11-3-96 and in 230 on 2-1-98. It has to be noted that PPP and RSPL were not registered with Central Excise at all. It was submitted that they were not dummy units since they were registered with small scale industries department, sales tax department etc. b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Eelectro Mechanical Engineering Corporation reported in 2008 (229) E.L.T. 321 (S.C.). In this judgment Hon'ble Supreme Court observed as follows : "10. The case of the Department is that these firms have been clubbed together as certain employees of the three firms were common or that their premises were adjoining each other. The Tribunal, while setting aside the order of the Commissioner, has held that there is no evidence on record to prove that there was mutuality of business interest or there was flow back of funds from one unit to another. The finding recorded by the Tribunal, being a finding of fact, docs not call for any interference." 7.5 As mentioned earlier, this decision is not relevant to the facts of this case since in the case under consideration by the Hon'ble Court the three premises were adjourning each other that means there were separate premises. In this case the premises are common and that too the factory premises. Similarly the reliance upon the decision of the Hon'ble Supreme Court in Supreme Washers Pvt. Ltd. reported in 2003 (151) E.L.T. 14 (S.C.) also cannot be of help to the appellants since in that case also the question before the Hon'ble Court wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value and claim for Modvat credit on the inputs utilized was to be considered. He submits that the claim for Modvat credit has been rejected on the ground that invoices were not produced but stated that invoices were actually produced. 8. As per the detailed discussions, we feel that this aspect also needs to be reconsidered the impugned order has to be set aside and accordingly we set aside above, the order and the matter remand to the Original Adjudicating Authority who shall- (i) verify the contentions of the appellant relating to six invoices in Annexure D-l and D-2 of the show cause notice and reconsider whether value of the goods covered by these invoices have to be taken twice or not. (ii) The Commissioner shall consider the request for Modvat credit on the inputs and also rework the turn over treating the amount received as cum-duty value. (iii) Penalty imposed on the partners of NAP needs to be requantified since duty demand would be reduced alter extending the benefit of cum-duty value and Modvat credit (if eligible). 9. Further, we also set aside the penalty imposed under Rule 173Q on NAP. 10. As regards penalty on Ms. H.A. Joshi, the same shall be reconsidered at ..... 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