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TMI Blog2009 (6) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... y and imposition of penalty on the units and also on Shri Sushil Khemka, Managing Director of M/s. Seshashaila Cements Pvt. Ltd. and the Director of M/s. Ennar Cements Pvt. Ltd. The Adjudicating authority confirmed the demand proposed in the show cause notice. However the demand has been made collectively from both the units. The Adjudicating authority has stated that it is left to the noticees to decide as to how much each one of them has to pay. 4. The case of the Department is that the appellants have manufactured and cleared 'Portland Cement' during the period from 1-4-2002 to March, 2005 clandestinely without payment of appropriate Central Excise duty and without proper accountal in the records. The two units are managed and controlled by the same family, namely husband and wife, both being common Directors in the companies. Both the units have manufactured the excisable goods, namely cement in one factory and cleared under the invoices of another company and vice versa, at their convenience in order to fraudulently avail the exemption provided to the SSI units, by distributing the value of clearances between the two units to remain within the admissible exemption limit. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) Kinjal Electronics [1989 (43) E.L.T. 854] (f) Swastik Engineering Works v. CCE [1992 (62) E.L.T. 313] (g) Super Star v. CCE [2002 (148) E.L.T. 854] (h) Padma Packages (P) Ltd. v. CCE [1997 (90) E.L.T. 175] (vi) The department having alleged that goods manufactured in one factory were cleared under the invoices of another, ought to have determined the quantity so cleared and added only the value of that quantity to the value of clearance of the respective units to ascertain each company's entitlement to SSI exemption and ought not to have clubbed the entire value of clearances. The entire demand has been collectively made against both the companies whose value of clearances is sought to be clubbed. The Commissioner while confirming the duty against both the companies has held that "the only option open to department is to demand the duty collectively from both the units and it is left to the noticees to decide as to how much each one of them has to pay". The impugned order is thus contrary to the following decisions :- (a) P.K. Industries v. CCE [2004 (163) E.L.T. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29-5-1992 are not applicable to the facts of the present case." On perusal of the above findings of the learned Commissioner, it is clearly stated that each appellant's company is separate. In respect of the Board's Circular, the clearances of the limited companies cannot be clubbed. The Commissioner has clubbed it and demanded duty collectively. This is not legal and correct and it is contrary to the Board's Circular. Moreover, on the issue of clubbing of clearances, the appellants had brought to our notice the following decisions :- Sl. No. Case laws Gist of the decision 1. Sapthagiri Cements Pvt. Ltd. v. CCE, Visakhapatnam [2005 (183) E.L.T. 385 (Tri.-Bang.)] SSI Exemption - Value of clearances - Clubbing of - Both the appellants being private limited companies, are distinct legal entities - Clearances cannot be clubbed merely because they have mutual interest - Entire basis for clubbing of clearances in show cause notice, wrong - No infirmity in impugned order in dropping the proceedings. 2. P.K. Industries v. CCE, Chandigarh-I [2004 (163) E.L.T. 204 (Tri.-Del.)] Value of clearances - Clubbing of - Both firms engaged in manufacture of different goods, their raw mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit - Clearances not clubbable - Situation not to be confused with that of related person concept under Section 4(4)(c) of Central Excises & Salt Act, 1944 - Notification No. 175/86-C.E., dated 1-3-1986 - Section 5A ibid. 5. Renu Tandon v. Union of India [1993 (66) E.L.T. 375 (Raj.)] Exemption - SSI Exemption - Clubbing of clearances - Two units situated at same premises, manufacturing similar product, having some common management, office and labour and common electric connection - One unit owned by father-in-law and the other by daughter-in-law and work of both units looked after by her husband - In absence of evidence of common funding and financial flowback, two units not treatable as one and their clearances not clubbable - Notification No. 175/86-C.E., dated 1-3-1986. 6. Vivomed Labs (P) Ltd. v. Collector of C.Ex. [1991 (53) E.L.T. 152 (Tribunal)] Exemption to SSI Units - Clubbing of clearances - Units registered separately under Income-tax Act, Sales Tax having separate Central Excise Licenses and also financed through separate application for loan from financial institutions - Shareholders in all the firms not the same group of persons - Tie up with Medly Pharmaceutic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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