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TMI Blog2010 (7) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 11AB of Central Excise Act, penalty of equal amount imposed on M/s. Servokon under Section 11AC of Central Excise Act and penalty of Rs. 2,00,000/- on Mr. Kamruddin, Director of M/s. Servokon under Rule 209A of Central Excise Rules, 1944 read with Rule 26 of the Central Excise Rules, 2002, upheld vide impugned order-in-appeal No. 68-69/09/CE/DLH/09 dated 13-4-09 passed by CCE(Appeals), Delhi-II and also for stay on their recovery till the disposal of the appeals. The facts giving rise to these appeals and the stay applications are, in brief, as under : 1.1 M/s. Servokon is a private limited company with Shri Kamruddin and his wife Smt. Fatima Begum as its Directors. This company is engaged in the manufacture of Voltage Stabilizers, C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and cupboards at the 1st floor of 54 Aram Park, Delhi, which were resumed by the officers. At the premises with address 54, Aram Park, Delhi which was office-cum-manufacturing premises, some manufacturing was going on which was admitted by Shri Avinash Arora. At the godown premises of M/s. Servokon at 43, Aram Park, Delhi, it was found that manufacturing activities were going on though there was no Central Excise Licence for this premises and stock of 120 pcs. of assorted servokon Voltage Stabilizers of different types found in the premises was placed under seizure. At the factory premises of M/s. Servokon and M/s. PS, the officials of these firms present there could not produce any central excise records and in absence of record, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plit up into two different units and that if the clearances of two units are clubbed, they would not be eligible for SSI exemption, a show cause notice was issued for proposing - (a) clubbing the clearances of M/s. Servokon Systems and M/s. Powerkon Systems for the purpose of determining the Central Excise Duty liability of M/s. Servokon Systems and also recovery of differential duty amounting to Rs. 20,11,317/- alongwith interest on it at the applicable rate from M/s. Servokon; (b) imposition of penalty on M/s. Servokon under Section 11AC of Central Excise Act, 44 read with Rule 173Q of Central Excise Rules, 1944, (c) confiscation of the seized goods, and (d) imposition of penalty on Sh. Kamruddin and Smt. Fatima Begu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Jt. Commissioner, the Commissioner(Appeals) vide order-in-appeal No. 68-69/2009/CE/DLH date 13-4-09 upheld the Jt. Commissioner s order. It is against this order of the Commissioner(Appeals) that these two appeals alongwith stay applications have been filed. 2. Heard both the sides. 2.1 Sh. Prem Ranjan, Advocate, learned Counsel for the Appellant, pleaded that M/s. Servokon, a private limited company in which Sh. Kamruddin and his wife Smt. Fatima Begum are Directors and M/s. PS a proprietary concern of Smt. Fatima Begum, are two independent legal entities naving separate and independent existence, that merely the fact that the Directors of M/s. Servokon are husband and wife and M/s. PS is the proprietorship concern of one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here Central Excise Duty was evaded by M/s. Servokon Systems by wrongly availing the exemption under Notification No. 1/93-C.E.; that in order to evade the duty payment by wrongly using the exemption, the manufacturing activity had been artificially split up, that both M/s. Servokon and M/s. PS were manufacturing the same items which were being sold under the brand name SERVOKON ; that Sh. Kamruddin has clearly admitted that though M/s. PS is a proprietary concern of his wife, it is he who was running its affairs; that the two units are dependent on each other for manufacture, that M/s. PS do not have their own electricity connection and electricity to M/s. PS was supplied through M/s. Servokon for which no payment was made by M/s. PS to M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty demand, interest and penalty. 3. We have carefully considered the submissions from both the sides and perused the records. Though M/s. Servokon is a private limited company with Sh. Kamruddin and his wife Smt. Fatima Begum, Directors and M/s. PS is a proprietorship concern of Smt. Fatima Begum, as admitted by Sh. Kamruddin, Director of M/s. Servokon, both the units were being managed by him only. The Appellants have not denied that M/s. PS did not have any power connection and the power to this unit was being supplied from M/s. Servokon for which no payment was being made. Similarly, we find that the staff as well as the labour pool of both the units was common and Sh. Kamruddin in his statement has admitted that the staff and labour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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