9911796707
TMI Blog1995 (10) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... He held the first appellant to be the manufacturer of all the goods. He consequently denied the benefit of Notification 80/80-C.E., dated 19-6-1980 for the year 1981-1982 and 1982-1983. He imposed a penalty of Rs. 30 Lakhs on the first appellant under Rule 173Q of the Central Excise Rules, 1944. 2. Shri V. Laxmi Kumaran, advocate explained that the technology for manufacture of the coolers had been obtained by the first appellant from Shri R. N. Kher under an agreement. It manufactured and cleared the goods in 1981-82 and 1982-83 after filing the declaration claiming the benefit of Notification 80/80. He said that the first appellant had entered into agreements with the other five appellants in November, 1981. These agreements provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in his order, were sought to be rebutted as being erroneous. He pointed out that there is a series of case law to say that common management, common directors, common partners, common staff and telephone, sale to one person etc. could not justify the clubbing. He particularly relied upon the decisions of this Tribunal in the following cases : 1985 (22) E.L.T. 302 - UOI v. Cibatul Limited 1992 (43) ECR 233 = 1992 (62) E.L.T. 313 - Swastik Engg Works Ors. v. C.C.E., Ahmedabad 1994 (71) E.L.T. 689 - Alpha Toyo Ltd. v. CCE, New Delhi 1994 (51) ECR 363 - Elgi Tyre Tread Ltd. Ors. v. CCE, Coimbatore 1995 (75) E.L.T. 12 - Basant Industries v. CCE, Kanpur 3. Shri Somesh Arora, DR argued that there were features in the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the six appellants is a separate legal entity and separately registered with sales tax and income tax authorities. The fact that there may be some common directors is by itself is not sufficient to hold that each are not independent legal entities. 6. The question that now arises is therefore, whether the facts that the price of the coolers was fixed and most of the production supplied to the first appellant would by itself justify the conclusion that these five were dummy or artificial creations of the first appellant. The Supreme Court in the Cibatul Ltd. case has held that where, according to an agreement the goods have been produced by the seller in accordance with the manufacturing programme drawn up jointly and according to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making, and acts of such nature. The dummy unit would be a mere facade one and in reality it is one and the same with the main unit. In this particular case, there is no such evidence at all, to show that such an arrangement is in existence. The mere fact of management control and a few directors being common and also by the fact that interest free loans are being given to the other units by the first unit, these factors, by itself, is no ground for holding them as dummy units and for ordering clubbing of all their clearances, and to deny the benefit of the exemption notification." 7. By applying the criteria laid down in this decision, we do not find it possible to agree that the restrictions on the pricing and manufacture of other goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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