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TMI Blog2003 (2) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... er-linked and inter-connected units. Kinotone were manufacturing/clearing complete cinema projectors by fragmenting/creating one more unit viz. Cine Lamp with a view to avail exemption under Notification No. 85/85-C.E., dated 17-3-85 and Notification No. 175/86-C.E., dated 1-3-86 and that goods were affixed with the Brand name ITEC belonging to M/s. Itec Pvt. Ltd. was not eligible for SSI exemption notification. The Collector, under the impugned order, confirmed the demand of Central Excise duty against M/s. Kinotone besides imposing a penalty of Rs. 5 lakh on them under Rule 173Q of the Central Excise Rules, 1944 and confiscating land, building, plant, machinery, etc., within an option to redeem the same on payment of fine of Rs. 50,000/- and also imposed penalty of Rs. 1 lakh on M/s. International Talkie and Rs. 50,000/- on M/s. Cine Lamp under Rule 209A of the Central Excise Rules, 1944. 2.2 The appeals filed by M/s. Kinotone and M/s. Cine Lamp were decided by the Tribunal vide Final Order Nos. 1337-1338/2000-B, dated 24-8-2000 [2001 (136) E.L.T. 676 (Tribunal)] wherein the demand of duty and imposition of penalty on M/s. Kinotone were upheld by the Tribunal and the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lja alone, at all times, involved himself in the day to day activity of the business; that after the death of Bharat Adalja in 1989, Pankaj Adalja took a power of attorney in June, 1989 from Jal Mistry who remained as a non-working, non-profit/loss sharing proprietor on paper without any remuneration; that thus technically for the entire period of notice, 1-4-85 to 31-3-1990, Bharat Adalja was alive and was a partner, except for ten months, from May, 1989 to March, 1990; that hence it was the Adalja family alone who controlled M/s. Kinotone during the entire period on the basis of the Power of Attorney on record; that the Collector also in the impugned order has declared that the members of the Adalja family have organised systematic scheme aimed at defrauding the Government of its legitimate revenue by dubious means. 3.2 The learned Advocate, further, submitted that Kinotone can never be called manufacturer of the Cinema Projector; that it is an admitted position in the impugned show cause notice as well as in the impugned order that Kinotone only manufactured some parts of the projector, viz. Projector Head, Sound Head, Magazine Boxes and Pedestals; that Kinotone never manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .7.2 of the notice it is mentioned that order for cinema projectors was procured by the Sales Representative/Branch Office of International Talkie who was also taking the initial amount/advance of orders under I.D.B.I. Scheme; that final acceptance of orders and allotment of code number to customers under I.D.B.I. Scheme were also made by International Talkie; that Cinema Projects were installed by International Talkie is evident from Para 5.7.3 of the show cause notice; that it is mentioned in Para 5.10.0 of the Notice that the average production of Kinotone was determined by International Talkie and Dipak Adalja, Director of International Talkie had called for details of cost production of all the major items manufactured by Kinotone as well as cost of production of arc lamp, etc. from Bharat Adalja. He also referred to Para 5.11.1 of the notice wherein it is mentioned that Area Manager of International Talkie, Madras had reported to the customers that they were manufacturers of cinema projects at Rajakot; that the sale proceeds under IDBI Scheme were transmitted to International Talkie (Para 5.12.4); that the price lists for Kinotone were also prepared by International Talkie (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Talkie and Adalja family are calling the shots and even then he had wrongly held Kinotone to be liable for duty and the penalty which is directly contradictory to the judgment of the Supreme Court; that the Tribunal in the case of Highland Dye Works (P) Limited v. CCE, Surat [2000 (121) E.L.T. 502 (Tribunal) = 2000 (40) RLT 368] has held that on clubbing of clearances of all units, liability to pay duty lies on the main unit and not on the facade units. 4.4 Finally, learned Advocate submitted that in other matters pertaining to the excise liability of the Adalja family, it was contended by them that another firm M/s. Itec Pvt. Ltd. was a separate concern; that recently in the case of CCE, Ahmedabad v. I.T.E.C. (P) Limited - 2002 (145) E.L.T. 280 (S.C.) has held that looking to the nexus between the Itec and International Talkie, the two are definitely inter-connected; that in the present appeal, it is the submission of the appellant that International Talkie is the principal company of the Adalja Group at all times; that the said company came into existence in the mid 40s, Itec came into existence as manufacturing company in the mid 50s and was closed on 31-3-81; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sides. A show cause notice dated 5-5-90 was issued for demanding Central Excise duty and for imposing penalty on Kinotone and International Talkie Equipment (P) Limited. A show cause notice was also issued to Cine Lamp for imposition of penalty under Rule 209A of Central Excise Rules, 1944. The basis for issue of show cause notice was that the said 3 units were inter-linked and inter-connected; that Kinotone was engaged in the manufacture/clearance of excisable goods namely, complete cinema projectors by fragmenting and creating one more unit : namely, Cine Lamp for availing the benefit of small scale unit under Notification No. 85/85-C.E. and Notification No. 175/86-C.E. The Collector in the impugned order has confirmed the demand of duty against Kinotone besides imposing penalty. The Collector has also imposed penalty on International Talkie and Cine Lamp, under Rule 209A of Central Excise Rules, 1944. The Collector has given his finding that the said 3 units are inter-linked and owned/managed/controlled by Adalja family; that there is no allegation that International Talkie are manufacturers themselves or that they manufactured the goods on behalf of either Cine Lamp or Kinoto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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