9911796707
TMI Blog2003 (8) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... hanan, and P. Jagadesh. P. Janarthanan died of road accident and thereafter the firm continued with remaining partners and after some time P. Jagadesh also retired from the partnership as he wanted to start an independent business. On dissolution of partnership, R.D. Pandian had taken over the assets and liabilities of the erstwhile firm and converted the said firm into a proprietory concern. Four factories were functioning in the same premises. As it appeared to the department that the above units were individually lacking the machines required for manufacture of the goods and that all the units are one and the same and in fact only one unit was manufacturing the goods by using the machines of other units, and raw materials, power, finance, employees are shared by each unit with a view to avoid payment of Central Excise duty, show cause notices were issued to all of them which culminated in the order of adjudication passed by the original authority by order-in-original No. 9/2001, dated 10-9-2001 by which he has come to a conclusion that clubbing of clearances of all the unit is justified and accordingly demanded duty of Rs. 27,80,571.67 under Section 11A of the CE Act, 1944 and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the goods is totally baseless. He has submitted that it is not the case of the department that they have visited the premises with any expert in the field before coming to a conclusion that they were lacking the indispensable machines for the manufacture of the goods. He has also invited our attention to the judgment of the Hon ble Supreme Court in the case of Gajanan Fabrics Distributors v. CCE, Pune reported in 1997 (92) E.L.T. 451 (S.C.) wherein it has been held that By confirming the demand on all the seven units the Collector appears, however to have treated them all as assessees and, implicitly recognised their independent existence and the matter was remanded by the Apex Court. He has also invited our attention to the order of this Bench of the Tribunal in the case of N. Sundareswaran Tin Factory reported in 1999 (105) E.L.T. 330 wherein in identical facts and circumstances, the matter was remanded for reconsideration. He has also invited our attention to the decision of the Bombay Bench of the Tribunal in the case of Sanjay Electrical Works v. CCE, Mumbai-VI reported in 1999 (114) E.L.T. 405 wherein it was held that demand can be raised against main unit when only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The first three show cause notices proposing to club the value of clearances of all the four units were issued to all the four appellants and their clearances have been taken into consideration while the last two show cause notices were issued to Vivekananda Industries and Venkateswara Industries only and clearances of those two units have only been taken into consideration for the purpose of clubbing. The opening paragraph of the show cause notice dated 2-5-88 is reproduced below : Where as it appears that M/s. Sri Vivekananda Industries, Sri Venkateswara Industries, Sri Manipandian Industries and Sri Vinayaga Industries are one and all the same factory and manufacturing line materials and cleared them to TNEB. In this connection a show cause notice has been issued to all the four units by Collector of Central Excise, Madurai vide C. No. V/72/15/15/88 CX-3, dated 4-3-88. To avoid payment of Central Excise duty the four units were fragmented into four small factories with inadequate machineries for the manufacture of line materials. Moreover there was no enough space to accommodate for the finished goods such as RTS Grills, etc., at the respective factories to keep the raw mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur units practically exist only in paper. It was also found that there has been considerable degree of common interest in the procurement of raw material, manufacturing operations and marketing their products . 9. We observe that there is not even a scrap of paper by way of evidence/record to substantiate the findings of the lower original authority which has been upheld by the lower appellate authority. The lower appellate authority has also unfortunately not made any observation while upholding the order-in-original as to from which appellants the duty is demanded. The appellants have taken a specific ground that for manufacture of RTS grills etc. no sophisticated machinery is required and that they have not entered into any contract with the TNEB for manufacture and supply of the goods and their supply was based on tenders floated by the TNEB. The department has not come out with any evidence to disprove the specific plea taken by the appellants in this regard. When they allege that indispensable machines were not available to manufacture the goods in question, the burden was on the department as to how they came to a conclusion that all the machines were not available for man ..... 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