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TMI Blog2012 (10) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant facts in brief that arise for consideration are by a show cause notice dated 18-12-91, Revenue Authorities called upon M/s. Balsara Hygiene Products Ltd. (hereinafter referred to as BHPL), M/s. Besterna Chemicals (hereinafter referred to as BC) and M/s. Besta Labs (hereinafter referred to as BL) to show cause as to differential duty be not demanded from them for availing ineligible benefit of SSI exemption and penalty be not imposed on them. All the three assessees contested the show cause notice before the authority and Collector, Vadodara vide his Order-in-Original dated 4-2-94 was pleased to confirm duty of Rs. 34,24,435.43 and Rs. 22,59,041.04 from the said M/s. BC and M/s. BL respectively and imposed penalty of Rs. 2 lakh on both the assessees. No duty was demanded from M/s. BHPL but a penalty of Rs. 5 lakhs was imposed on M/s. BHPL. Aggrieved by such an order, all the assessees preferred an appeal to the Tribunal and Tribunal vide its final order dated 24-3-99 set aside the impugned order and remanded the proceedings to the adjudicating authority to reconsider the issue afresh. The impugned order today is in de novo proceedings wherein the adjudicating authority h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant in a position worse than at the time of final appeal and this ratio has been followed by the Tribunal in the case of Gautam Diagnostics Centre v. C.C. Mumbai - 2003 (159) E.L.T. 678. It is his submission that the duty is sought to be demanded from M/s. BHPL, M/s. BC and M/s. BL on the ground that M/s. BC and M/s. BL are dummy units of M/s. BHPL and were created by M/s. BHPL for the purpose of claiming of exemption of Notification No. 175/86. It is his submission that the impugned order purports demand of duties from the M/s. BHPL, M/s. BC and M/s. BL for the respective clearances, it shows that the adjudicating authority having demanded duty from alleged dummy units for the respective clearances would recognize their independent existence. It is his submission that on this ground itself the impugned order is liable to be set aside. He would rely upon the judgment of the Apex Court in the case of Gajanan Fabrics Distributors - 1997 (92) E.L.T. 451 (S.C.) for this proposition. He would submit that this ratio was followed by the Tribunal in the following decisions : Commissioner of C. Ex., Chandigarh v. Shiva Exim Enterprises reported in 2005 (185) E.L.T. 169 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of this proposition. Commissioner of C.Ex Hyderabad-I v. Agarwal Rubber Pvt. Ltd. reported in 2009 (238) E.L.T. 336 (Tri. - Bang.) Commr. of C. Ex, Mangalore v. Sushil Chemicals reported in 2008 (230) E.L.T. 117 (Tri. - Bang.) Universal Industries v. Commissioner of Central Excise, Pune reported In 2005 (188) E.L.T. 200 (Tri. - Mumbai) Special Machines v. Commissioner of Central Excise, Delhi reported in 2004 (169) E.L.T. 215 (Tri. - Del.) Bright Gems Company v. Commissioner of Central Excise, Madurai reported in 2004 (173) E.L.T. 173 (Tri. - Chennai) Alpha Toyo Ltd v. Collector of Central Excise, New Delhi reported in 1994 (71) E.L.T. 689 (Tribunal) K.R. Balachandran v. Commissioner of C. Ex., Coimbatore reported in 2003 (151) E.L.T. 68 (Tri. - Chennai) 3.2 It is his submission that in any case the extended period on limitation cannot be invoked as all the appellants were granted separate registration and their clearances during the earlier period were never sought to be clubbed and the appellants have been filing regular returns with the authorities. It is his submission that no penalties ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial terms. Ld. adjudicating authority has recorded that M/s. BC had given loan to M/s. BL, Besta Cosmetics Ltd., Balsara Research Products, etc. Commercial Pvt. Ltd., and several other companies. It is his findings that three units are either directly managed or controlled by M/s. BHPL and hence there is an interlink between M/s. BHPL, M/s. BC and M/s. BL. We find that the said findings recorded by the adjudicating authority are shorn of evidence which could indicate that M/s. BHPL exercised summary control over M/s. BC in any form. Giving of loan by M/s. BC to any company, the said company whether it is controlled, directly managed by M/s, BHPL is not proved on record and the said loans given by M/s. BC to various people cannot be called in question as they were clearly indicative of transactions which were sought to be made by M/s. BC. The learned adjudicating authority has tried to justify the clubbing of the clearances by indicating that M/s. Besta Cosmetics Ltd., was a case of advance for supply of goods to M/s. Besta Lab and the said M/s. Besta Cosmetics Ltd. being controlled or managed over by M/s. BHPL but the transaction between M/s. BL and M/s. BHPL needs to be clu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and this has been accepted by the learned Collector and in this background it was necessary for the department to establish with evidence that in fact the operations of the two units were part of the same business event. While the operations of the appellants may be entirely colourable, we cannot say that the case against the appellants has been established beyond a reasonable doubt. We, therefore, give the benefit of doubt to the appellants and hold that the case against them has not been proved by the authorities with requisite evidence and set aside the order of the lower authority with consequential relief. We, therefore, allow the appeal in the above terms. 9. In our considered view, the adjudicating authority should have followed the law laid down by the higher judicial fora i.e. Tribunal on this point. 10. Another point on which the adjudicating authority has confirmed the demands raised on the appellant is on the ground that the entire products of the units of M/s. BL and M/s. BC were sold to M/s. BHPL. We find that in an identical situation, the following decisions squarely cover the issue in favour of the assessee wherein it is held that clubbing of two units cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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