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TMI Blog1999 (9) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... the price adopted by Hirusah Cosmetics for sale of the said Talcum Powder. Value of clearances of 9 units have been clubbed with that of M/s. Hirusah Cosmetics and a demand of duty of Rs. 1,49,48,158/- has been confirmed invoking the extended period under proviso to Sub-Section 1 of Section 11A of the Central Excise Act. Penalty of Rs. 20,00,000/- has been imposed on M/s. Hirusah Cosmetics and penalty of Rs. 25,000/- each on the 9 units noted above under Rule 209A. 2. Heard ld. Advocate Shri V. Lakshmi Kumaran assisted by Shri G. Sivadas and J. Shankar Raman, ld. Advocates for the appellants and Mrs. Aruna Gupta, ld. DR. 3. Ld. Advocate submits that the appellants contest the order impugned both on merits as well as on limitation. We were taken through the history from the constitution of M/s. Hirusah Cosmetics on 25-4-1991 and a declaration filed with the Central Excise authorities on 22-8-1991 regarding their business and claiming exemption under the said Notification. Thereafter, the various units filed declarations with the respective Central Excise offices from time to time as they commenced their business. This continued for each financial year and the last set of declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubts on the eligibility of exemption after consideration of all these informations available with the department was entertained by the officers. In fact, though this information was given from 1991 upto 1993 as detailed above, the department for the first time started harbouring a doubt on the eligibility for exemption only on the basis of investigations in September, 1994. Yet, the order impugned has invoked the extended period right from October, 1991. The show cause notice dated 4-11-1996 has been issued even more than 2 years after the investigations started. The sum total of the picture emerging there from is that there was no suppression and the demand is hit by limitation of time bar. 5. On merits, ld. Advocate submitted as follows :- (a) Each of the manufacturing unit of Talcum Powder and supplying the same to M/s Hirusah Cosmetics have entered into agreements with the latter which is on a principal to principal basis because M/s Hirusah Cosmetics has neither financed these units in any way nor is there any evidence of any flow back of profits. (b) Each of the units have submitted their independent declaration to the Central Excise Authorities claiming SSI exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corpn. v. C.C.E. as in 1987 (32) E.L.T. 94 (Tribunal), Alpha Toyo Ltd. v. C.C.E. as in 1994 (71) E.L.T. 689 (Tribunal) and Swastik Engineering Works Others v. C.C.E. as in [1992 (62) E.L.T. 313 (Tribunal) = 1992 (43) ECR 233]. 6. Ld. DR Mrs. Aruna Gupta submitted that the order impugned is a detailed order and she reiterated the findings thereof. She submits that the overall picture emerging from the facts of the case is that M/s. Hirusah Cosmetics encouraged the manufacturing units, supplied them with technical know-how for the manufacture of the said Lavanya brand Talcum powder merely to evade duty by fragmentation of the total talcum powder produced. She further submits that the question of clubbing was considered by the Tribunal in detail in the case of Sanjay Steel Co. v. C.C.E. as in 1996 (84) E.L.T. 307 and the facts of the present case are on all force as that contained in the said decision. She also submitted that in the case of J.N. Marshall Pvt. Ltd. v. C.C.E. as in 1997 (96) E.L.T. 149 (Tribunal) it has been held that separate registration of Sales Tax, separate income-tax assessment do not have much relevance with respect to clubbing of clearances under the SSI No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and selling the entire quantity to M/s. Hirusah Cosmetics. Therefore, there has been no suppression as far as the manufacture of Talcum Powder bearing the brand name of Hirusah Cosmetics is concerned. (b) Perusal of the records also shows that these declarations were accepted by various jurisdictional Range Superintendents for the year 1991-92 and 1992-93. Obviously, enquiries must have been made prior to acceptance of such declarations. Having accepted these declarations, unless the Revenue is in a position to show that something more needed to be declared in these declarations, the extended period on charge of suppression cannot be invoked. (c) The order impugned is totally silent on the correspondences exchanged between the department and M/s. Hirusah Cosmetics, which is available on page 58 onwards of the paperbook. A perusal of that shows that on the basis of declarations received by the Range Superintendent from M/s. Hirusah Cosmetics, vide his letter dated 5-9-1991 which is well before the commencement of the disputed period, detailed information was called for on all aspects considered necessary to be examined by the department. Reply on each of these subjects was sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his question of limitation as extracted above would show that none of the issues discussed in sub-paras above were considered therein and that the only reason for invoking extended period is that it has been clearly brought out in para 40 of the show casue notice that M/s. Hirusah Cosmetics were guilty of deliberate evasion of payment of duty. (g) The earlier findings in the order impugned are to the effect that the 9 units were dummy units and were more in the nature of hired labour hired by M/s. Hirusah Cosmetics, and since this aspect was not disclosed correctly, therefore the extended period is applicable. In the first place, we find that since these units had separate physical premises, machineries, they were registered with Sales Tax authorities, they have their own bank accounts and they filed separate declarations to this effect to the departmental officers, therefore in view of the Tribunal s decision in the case of Swastik Engineering Works Others (supra) and the decision in the case of Alpha Toyo Ltd. (supra), just because all were manufacturing common branded item, it cannot be held that they were dummy units. We find that each unit physically existed, had its own p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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