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TMI Blog1989 (10) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Mill had not taken out a Central Excise licence and the fabric found were seized. The officers also found on a scrutiny of the records that there was another unit functioning in the same premises under the name of M/s. Abirami Mills. Both the units were found to be engaged in the business of processing of fabrics. The power was found to be used in M/s. Abirami Mills unit and held that the benefit of Notification 130/82 and Notification 253/82 availed of by the two units was not available to them. The officers held M/s. Annapoorna Mills as the manufacturing unit and treated M/s. Abirami Mills as shadow unit and issued a show cause notice to M/s. Annapoorna Mills and duty in respect of the past clearances was demanded from them. It was, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o this evidence-: I do not therefore safe in placing any reliance on this evidence. The learned Collector also has observed that the Mills are located in the same enclosed space and are in the nature of two sheds like two rooms inside a house. He has also taken note of the fact that the grey cotton fabrics received by both the units and fabrics processed in both the units were stored in the same premises and also that the chemicals used by both the units were stored in the same premises. This, according to the learned Collector, has not been repudiated and he has considered this as a vital point for arriving at his conclusion. It is also seen that the learned Collector has taken note of the fact that both the units had come into exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit of Notification No. 130/82 are also not available. The duty as demanded as per Show Cause Notice is leviable. The learned Collector passed the impugned order demanding duty of Rs. 79,264.48 in respect of the clearances made in the past and also Rs. 737.42 in respect of the fabrics seized separately and has imposed a penalty of Rs. 2,000 on the appellants Mills. 2. The learned Advocate for the appellants pleaded that the two units were separate and that M/s. Annapoorna Mills is entitled for the benefit of Notification 130/82 inasmuch as they were carrying on the processing without the aid of power and M/s. Abirami Mills were eligible for the benefit of Notification 253/82 inasmuch as they were carrying on the processing as covere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether the two units can he treated as one for the Central Excise purposes and in that case whether the benefit of Notification 130/82 and Notification 253/82 as claimed would be available to the appellants. We observe that the learned Collector has recognised that the two units have to be treated as separate concerns by virtue of the two being separate partnership entities. Having recognised the legal status of the two units as such, he has proceeded to hold that so far as manufacture of fabrics in the two units are concerned the same has to be treated as if by one unit. He has placed heavy reliance on the fact that the appellants had common store and the chemicals and grey fabrics were stored for the two units together and also the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not on record. There is no investigation also in regard to that on record. After the learned Collector had accepted that the two units legally are separate partnership concerns, it was desirable for him to show that the processing operations and the business operations being carried out were such that these could be treated as the operations of one unit only. When the two concerns are partnership concerns and which have been accepted to be so by the authorities, some convergence of interest apparently can be there by way of accommodation for storing the material etc., but it has to be shown that the convergence is such that the operations of the two units could be taken to have been merged into one. This has not been brought on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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