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TMI Blog2008 (1) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... Chem (P) Ltd., Rs. 1 lakh on Shri Devendrakumar Raibali Yadav, Director, M/s. Penco Trade Chem (P) Ltd. and Rs. 1 lakh on Shri Jitendra Kumar Yadav, Director, M/s. Desmo Exports Ltd., Thane. 2. The brief facts of the case are that the appellant M/s. Penco Trade Chem (P) Ltd. is engaged in the manufacture of solvent and thinners and was availing SSI exemption under Notification No. 8/2001-C.E., dated 1-3-2001. As a result of certain investigations carried out, it appeared that this company was floated by M/s. Desmo Exports Ltd. incorporated in 1993 at Thane who also was engaged in manufacture of solvents and thinners and both were availing SSI exemption under Notification No. 8/2001-C.E., dated 1-3-2001. Investigations revealed that the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity condition for availing SSI exemption and accordingly duties were demanded and penalties were proposed. The show cause notice was adjudicated by the Commissioner who held that the two companies were having mutuality of interest in each other and were controlled by the same management and were inter-dependent for funds and materials and therefore denied the SSI exemption by clubbing the clearances of the two companies, and demanded duty of Rs. 37,00,810/- along with interest and imposed penalty of equal amount on them. Penalties of Rs. 8 lakhs on Shri Dilip Kumar Jindal, Director, M/s. Penco Trade Chem (P) Ltd., Rs. 1 lakh each on Shri Devendrakumar Raibali Yadav and Shri Jitendra Kumar Yadav who were found to be dummy directors of M/s. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, show cause notices on identical grounds have been issued to both the units and duty has been demanded from both the units. The show cause notices have been adjudicated by different Commissioners without having a common adjudicating authority. If it is revenue s case that both the units belong to same manufacturer, the duty should have been demanded from only one of the manufacturer which it considered was real manufacturer. While show cause notice alleges that M/s. Penco Trade Chem (P) Ltd. has been floated by M/s. Desmo Exports Ltd. duty has been demanded form M/s. Penco Trade Chem (P) Ltd. in the present case which cannot be done if the revenue s case is that M/s. Desmo Exports Ltd. is the parent manufacturer and has floated an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be clubbed. Similarly in the case of NMS Babu v. CCE, Bangalore, 2006 (198) E.L.T. 528 (Tri. - Bang.) it was again held that clearances of limited companies cannot be clubbed - Commissioner s finding that one company is subsidiary of the other then their clearances should be clubbed is unwarranted. 5. In support of his contention that if the revenue considers one unit is a principal manufacturer then the duty should have been demanded only from that unit and cannot be demanded from all the units. In support of this attention was invited to the Tribunal s decision in the case of Rupani Textile Industries, 1999 (113) E.L.T. 946 (CEGAT) wherein it was held that demand raised by Collector against all units instead of the one considered to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant and also by the various Tribunal decisions cited by them has not been agreed to by the Apex Court in the case of Modi Alkalies Chemicals Ltd., 2004 (171) E.L.T. 155 (S.C.) wherein the Apex Court, looking into the circumstances of the case has held that the clearance of the four units involved therein was required to be clubbed and duty was correctly demanded from one of the units. It was therefore submitted that the decisions cited by the ld. Advocate for the applicants no more hold the file and accordingly the demand has been correctly confirmed and therefore the applicants should not be granted any waiver from pre-deposit of duty and penalties. 7. We have considered the submissions. We find that it is an admitted fact that the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision in the case of Modi Alkalies Chemicals Ltd. is entirely on different footing where both the show cause notice and the order-in-original proceeded on the ground that Modi Alkalies Chemicals Ltd. have folated their other front companies only with a view to avail SSI exemption. In that case Modi Alkalies Chemicals Ltd. were manufacturing hydrogen gas which was sent through pipe line to the other three from companies which were located adjacent to each other and were separated by just a small brick walls of four feet height. The directors of the three front companies were also employees of Modi Alkalies Chemicals Ltd. and were frequently changed. They had common staff for maintenance of records, and operation of the units. The mai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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