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TMI Blog2014 (10) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... sting falling under Chapter Heading 7325.10 of the Schedule of CETA, 1985. 3. During the financial year 199798, the appellant availed Small Scale Industry Exemption under Notification No.7/97CE dated 01.03.1997. Simultaneously, other firm M/s. Parag Industries separately and independently availed SSI Exemption during the same financial year. The Central Government issued four show cause notices on the ground that the two units are owned by one manufacturer namely the appellant / company; as a result, the smallscale industries exemption is not available to the appellant. Detailed reply has been filed by the appellant denying all the allegations contained in the show cause notice. It is not disputed that both the units are manufacturing different products at independent factories, which had been issued separate factory licenses and Central Excise Registration. 4. The Assistant Commissioner, Central Excise, Ujjain vide order dated 31.12.1998 confirmed the demand and imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt (balancesheet) of the appellant. Statement recorded from Shri Bhargav on 22.07.1997 proves that there was a consolidated profit and loss account prepared for both the units. That consolidated statement enabled the appellant to avail loan from financial institutions. The income tax assessment of both the units was jointly made because of consolidated accounts filed by the appellant before the income tax authority. The learned Tribunal set aside the order passed by the Commissioner (Appeals) and allowed the order of adjudicating authority. 8. It is submitted by the learned counsel for the appellant that the question involved in this appeal is squarely covered by the decision of the Apex Court in the case of Rollatainers Limited v. Commissioner of Central Excise, DelhiIII [2004 (170) ELT 257 (SC)]. The Apex Court has held that two factories within same premises, same owner and common balancesheet with common boundaries, but having separate staff, separate management, separate passage, separate entrance with separate Central Excise Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; of evidence to suggest that the companies are related not only in terms of financial control, but also through management personnel. In Modi Alkalies & Chemicals Ltd. & Ors (supra) this Court has held that two basic features which prima facie show interdependence are pervasive financial control and management control. We, therefore, proceed to apply the said two tests to the facts of this case. 13. R. Chauhan, P. Chauhan, R.N. Mungale and S.K. Motani, who are the directors of the appellant herein are among those who also serve on the Board of Directors in M/s PEL Ltd. and M/s PIL Ltd. It is also a fact on record that that M/s. PEL advanced an interestfree loan of Rs. 1 crore to the appellant, which was used for purchase of raw material by the latter (As evidenced from the balance sheet). Furthermore, the flavours being manufactured by the appellant were developed by M/SPEL at their R & D Lab at Bombay, whose services were at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant in the present case, fall within the said category. The mere difference in nomenclature cannot take away the import of the Explanation from its applicability to the present case. The appellant herein manufactures flavours which fall within the ambit of the `code names' and it is a fact on record that these codes are key to identifying the flavours which are commercially transferable. 15. Furthermore, it is expressly clear that the code names on the flavours indicate a connection in the course of trade between the specified goods and such person using such name or mark. The flavours in question, which were earlier manufactured by M/ s PEL Ltd. and supplied to the franchise holders, were subsequently allowed to be made by the appellant. The franchise holders were in effect buying the very same flavours from the appellant and were placing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Excise v. Modi Alkalies & Chemicals Limited (supra), the question whether there is interdependence and whether another unit is, in fact, a dummy has been adjudicated and the Hon'ble Supreme Court has held the following in paragraph 8, which reads as under: "8. Whether there is interdependence and whether another unit is, in fact, a dummy has to be adjudicated on the facts of each case. There cannot be any generalization or rule of universal application. Two basic features which prima facie show interdependence are pervasive financial control and management control. In the present case facts clearly show financial control. Undisputedly, the share capital of each of the three companies was Rs. 200/. Though it was claimed that financial assistance was availed from the financial companies, it is on record that the unsec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; and management aspects by MACL. If these are not sufficient to show interdependence probably nothing better would show the same. The factors which have weighed with CEGAT like registration of three companies under the sales tax and income tax authorities have to be considered in the background of factual position noted above. When the corporate veil is lifted what comes into focus is only the shadow and not any substance about the existence of the three companies independently. The circular no.6/92 dated 29.5.1992 has no relevance because it related to notification no.175/86CE dated 1.3.1986 and did not relate to notification no.1/93. The extended period of limitation was clearly applicable on the facts of the case, as suppression of material features and factors has been clearly established. If in reality the three companies are front companies then the price per unit to be assessed in the hands of MACL is Rs. 5 and not Rs. 0.50 as disclosed. The question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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