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TMI Blog2013 (11) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... d exemption had to be reckoned as if M/s ISC had manufactured and cleared the goods. The period of demand is 1993-94, 1994-95 and 1995-96 up to 11-03-96. The Show Cause Notice was issued on 08-07-1998. The demand confirmed is Rs.1,40,880/- along with interest and penalty. 2. The evidence relied upon by the Revenue are the following:- (i) M/s. ISC was a proprietorship concern of S. Kumarasamy and M/s. BMTwas a proprietorship concern of Smt. Meenakshi w/o S. Kumarasamy and the affairs of both the units were being managed by S. Kumarasamy because he was holding the power of attorney for BMT. (ii) The premises of the two buildings were adjacent separated by a common passage with the doors of each premises leading to the common passage. (iii) When the officers visited the premises on 13-03-96, in the portion occupied by ISC, manufacturing activities of punching, cutting and bending steel were undertaken to manufacture springs and textile machine spares. (iv) On that day, that is 13-03-96, in the premises belonging to BMT, the process of bending and hand tampering of coiled springs were beingcarried out; (v) In the common passage tampering furnace and acid tank were seen. These wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, ShriKumarasamy stated that the hand winding machine appearing on 15.4.1996 was available in some other portion of the building on 13-03-96 and he had forgotten to include this machinery on 13.3.1996. 7. Revenue also found transfer of money between the two units as under:- Year Amount given by ISC to BMT Amount given by BMT to ISC 84500.00 100000.00 1992 -93 70000.00 Nil 1993 -94 310000.00 40000.00 1994 -95 200000.00 30200.00 1995 -96 75000.00 235000.00 8. Revenue also noticed that the building maintenance charge for both the units was being met by M/s. ISC. 9. Thus M/s. ISC and M/s. BMT manufacture textile machinery spares and coiled springs. Their raw materials were basically steel/iron wire rods for coiled springs and steel sheets for making leaf springs and textile spares. From the facts, statements, mahazars and other records it appeared that neither M/s. ISC nor M/s. BMT had the entire machinery and other infrastructural facilities to manufacture the finished goods independently. In fact the machineries in both the units put together made a complete set of machinery required for manufacturing the final products. Both the companies depended on eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals). At the time of deciding the appeal by the first appellate authority, ShriKumarasamy had passed away. Therefore, the first appellate authority confirmed the duty demand on the first appellant and penalty imposed on the second appellant. But the penalty imposed on the deceased proprietor of ISC was set aside. Aggrieved by the order of the Commissioner (Appeals), ISC and BMT have filed appeals before this Tribunal. The appeal for ISC has been filed by Shri K. Balamurugan, proprietor, who has succeeded ShriKumarasamy. 12. Arguing for the appellant, the learned counsel submits that there is no finding in the Order-in-Original that BMT was a dummy unit. He claimed that BMT had been in existence sinceMay 1982 and ISC had been in existence from August 1973 and in support of the claim the appellants had submitted, along with appeal papers, Registration issued by Commercial Tax Officer, Singanallur Circle. It is contended that they had independent machinery, manufacturing facilities, power connection and work force and they were independently assessed by Government Departments such as sales tax, income tax, ESI, PF. The learned counsel argues that Revenue has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls were furnished:- Declarations filed for the year Serial No. allotted by Department Date of acknowledgement 1985 -86 16/85-86 9.1.1986 1986-87 17/87-88 5.9.1986 1987 -88 1/87-88 2.4.1987 1988-89 1/88-89 of Section II Assistant Commissioner's letter C. No. IV/16/149/88 Pol dated 3.11.1988 5.4.1988 1989 -90 15/89-89 II B Assistant Commissioner's letter C. No. IV/16/85/89 dated 23.6.89 11.4.1989 1990 -91 16.3.1990 1991 -92 15.4.1991 1992 -93 Sl. No. 35/92-93 9.6.1992 1993 -94 Sl. No. 44/93-94 29.9.1993 1994 -95 Sl. No. 6/94-95 2.5.1994 16. Ld Counsel further argues that the demandis on ISC and since the proprietor Shri. S Kumaraswamy is no more the demand cannot survive. He relies on the following decisions: (a) D. Matai Vs. CCE Mumbai-2000(1264) ELT 126 (b) Mafhh ducts Vs. CCE-2003 (57) RLT 596 (CEGAT-Mum) (c) The State of Punjab Vs. Jullunder Vegetable Syndicate-1966 (16) STC 326 (Supreme Court) 17. Thus the Ld. Counsel submits that the demand is not maintainable on merits and on account of time bar in raising the demand and hence the same may be dropped. 18. Opposing the prayer the Ld. A. R. for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h situation the Tribunal held in the case of Quality Steel Industries Vs. CCE-1989 (43) ELT 775 that the clearances of the two units can be clubbed. This is case where the turnover exceeded the exempted limit and the appellants split the existing machineries into two lots. Any of the lotsof machineries was not sufficient to complete manufacturing process of final products which clearly demonstrates that the splitting is only for evading Central Excise duty. He argues that physically the two units may not be dummy because they have separate buildings. But as a factory producing springs and textile machineries boththese units do not have separate existence. Such existence cannot be achieved by taking registration under sales tax or submitting separate Income Tax return. What is required to be seen is that whether the two factories had separate facilities for manufacture of final products. When the answer to this question is in the negative the two entities cannot be considered as separate entities for the purpose of availing SSI exemption. 20. In the matter of time bar the Ld A. R. relies on the finding in para 23 of adjudication order. The contentions regarding the invoking extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, I find from para 23 of the impugned order that the lower authority has made a detailed discussion to substantiate the allegation of suppression of material facts to avail the exemption wrongly. I find no valid reason advanced by the appellants in the grounds of appeal to disprove the findings of the lower authority. 22. The ld. A. R. pointed out that in the cases relied upon by the Advocate regarding proceeding against a proprietorship after the death of the proprietor, the notices were issued after the death of the proprietor. In this case the notice was issued before the death of the proprietor and adjudication also was completed and therefore the decisions are not applicable to the facts of the case. 23. We have considered submissions on both sides. From the facts of the case it is quite clear that neither of the factories had complete equipment for manufacture the final products. It is not a case of one equipment being shared by two units. It is more of case where one set of equipment is grouped into two premises and exemption claimed in the name of the two units. It is also clear that both the units were in effect operated by the same person. The facts of the case are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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