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TMI Blog2000 (9) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri R.S. Kumaravel, -do- S/o B.A.R. Sundaravel M/s. Emerald Stampings Shri B.A. Rajamanickam, -do- F/o B.A.R. Sundaravel M/s. Siva Industries S/Shri B.A.R. Sundaravel, Partner K.S. Kumaravel, Partner Rajamanickam, Partner Smt. Madeswari, Partner Thus, at the outset it can be seen that all the five units have been owned by very close blood relatives. 16. It is very surprising to see that Shri Kumaravel in his statement had said that he did not know as to how he came to invest about Rs. One lakh in a company allegedly owned by him. His statement is revealing. Similarly, the ignorance displayed by Shri Kumaravel, Rajamanickam and Smt. Madeswari regarding the type of goods manufactured in their unit clearly shows that they were not fully in the picture either about the investment or about the manufacturing activity. 17. While interrogating the workers and the clerical staff it has come to be known that there was no permanent set of workers or clerks but only temporary persons were working in each unit alternatively. The place in which these units were located is another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y met or answered properly. 20. In addition, as discussed in the show cause notice, the purchase of raw materials and the clearance of finished product did show that M/s. Golden Stampings had a leading role to play in all these activities. This is also very evident from another factory, namely, that on the visit of the Officers on 9-2-1990 unaccounted stampings were found in the premises of M/s. Golden Stampings. Thus, among these five units, there was no indication so as to show that they had separate investments separate manufacturing premises, separate labour force and electricity supply and separate production records. Even the machinery was commonly used. Where confronted, efforts were made to judge a lease deed prepared in a hurry which has proved to be a flop. The foreman also clearly brought out the manner of the functioning of these units. 21. In reply to the show cause notice, the party had merely denied all these except the seizure of unaccounted stampings. Further, the party had relied upon some of the judgments of the Court and Tribunal. It is true that in some of the cases various courts have held that mere participation of close blood relations alone could not es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablish the case against the appellants for fastening duty liability on them something more would be required, for example, the existence of a person or a body of persons who, in reality, owned directed and controlled the production in the four separate units which would show that 4 units were only a fa ade to avail of the exemption. It can be said without hesitation that in the instant case, Shri Sundaravel has taken the lead role in organising fragmentation by inducting wife, son, and father and organishing manufacturing and other operations. A confused and contradictory statement given by other partners of Shri Sundaravel clearly establishes the fact that it was he who had the full knowledge about the savings and others were idle partners. Apart from M/s. Golden Stampings, four other units have been created solely with a purpose of evading Central Excise duty. 25. Thus, in the instant case all the essential ingredients which go to prove that there has been fragmentation of units with a motive to evade Central Excise duty are available, namely, the members are all very closely related persons; there has been a financial accommodation; there has been free use of machinery fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat their account books were found in the premises of M/s. Golden Stampings Company, as the other companies had stopped the production and had disposed of all the goods and with a view to make the books available to the Central Excise officers, these books had been kept in the factory premises of M/s. Golden Stampings Company. They have also emphasized that all the appellants units were independent, separate legal entity and simply because all the appellants are close relatives of the proprietor of M/s. Golden Stampings Co., they cannot be considered as one and the same. In the written submissions received along with their letter dated 21-10-1999, they had claimed that the Tribunal has held in the case of Bhagavandas v. CCE as reported in 1987 (32) E.L.T. 204 (T) that clearances should not be clubbed, if the manufacturers have separate legal entity and the Revenue had treated them separately. They have also mentioned that their premises were separate, labour force were separate and occasional sharing of work force cannot be a conclusive evidence for working on behalf of others. Reliance has been placed on the decision in the case of Shree Packaging Corporation v. CCE as reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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