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TMI Blog2017 (10) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... (M/s. SCPL for short) having two Directors Shri Atul Gulati and Shri Arjun Bisht were was established in the year 1978 and got registered with Central Excise department in the year 1993 and surrendered their Central Excise registration in the year 2002. M/s. Emulsion Products is a partnership firm having two partners namely, Shri Atul Gulati and Shri Arjun Bisht, it was established in the year 1977 and got registered in the year 1997 and it has also surrendered Central Excise registration in the year 2002. 3. M/s. ADCL is located at Plot No.40, at Shed No. C, DLF Industrial Estate, Faridabad, M/s. SCPL is located at Plot No. 40, at Shed No. D,E and F, Industrial Estate, Faridabad and M/s. Emulsion Product is located at t Plot No. 40, at Shed No. A, B and I, Industrial Estate, Faridabad. The allegation of the Revenue is that M/s. SCPL and M/s. Emulsion Products are dummy units and manufacturing activities being undertaken by M/s. ADCL as the appellant did not have entire machinery for manufacturing of their final products. M/s. ADCL is engaged in the manufacture of Poly Vinyl Acetate Emulsion and M/s. SCPL and Emulsion Products were engaged in the manufacture Synthetic Adhesives. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss-examination was denied to them, on the ground that the statements were given by the employees voluntarily. Therefore, the finding of the adjudicating authority is baseless as the statement of employees cannot be relied upon until-unless opportunity of cross-examination is granted to the appellant. He further submits that, without admitting, even if some employees are common, then also it cannot be a ground to club the clearances of three units by holding that the units are dummy units. He further submits that Boiler and Generator Set is only common for all the units and the same cannot be a ground for clubbing the clearances as the units were having independent machineries to manufacture the goods manufactured by them independently. He also relied upon the CBEC Circular No. 6/1992 dated 26.05.1992 wherein it has been held Limited company whether public or private are separate entities entitled to separate exemption limit and clubbing of the clearances in such case cannot be done. He relied upon various case laws to say that clearances made by them cannot be clubbed:- (a) CCE, Ludhiana Vs. Jagjit Agro Industries - 2014 (309) ELT 301 (Tri.) (b) Ghaziabad Organics Limited - 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common gate and employees in all the three units were common. He also submits that machineries installed in the factory were not complete to manufacture the final product. All the three units were managed by Shri Atul Gulati and to that effect, the statement of employees was recorded. In that circumstance, the clearances made by the appellants have been rightly clubbed and benefit of SSI exemption notification is rightly denied to them. To support his contention, ld. AR relied upon the decision in the case of Calcutta Chromotype Limited Vs. CCE, Calcutta - 1998 (99) ELT 202 (SC) and CCE, Pune Vs. Elemec Industries - 2000 (12) ELT 198 (Tri.). 8. Heard the parties and considered the submissions. 9. We find that in this case, all the three units were established way back in 1970s and all the units were registered with Central Excise department and having separate registrations. All the units have surrendered their Central Excise registration in the year 2002. As the facts of establishment of these units were in the knowledge of the department and have been granted registration under Central Excise Acts, after due verification and it is fact on record machineries were not disputed wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the bank account herself. After starting manufacture of copper wires she submitted return in Form RT-12 to the Supdt. Customs and Central Excise. The first return was submitted on 7-10-1989. It was only on 29th August, 1990 that a notice was issued to the petitioner to show cause as to why the classification list effective from 1-4-1990 should not be approved taking into consideration the value of clearances of both the units as clubbed together. The only ground to issue such a notice was that the two factories are located adjacent to each other and that the proprietor of M/s. Tandon Brothers happens to be the father-in-law of the petitioner and that the work of both these units is being looked after by Shri Avinash Tandon who is the husband of the petitioner and son of Shri S.K. Tandon and that she has been consuming electric power from M/s. Tandon Brothers. These facts which have been mentioned in the show cause notice, in no way, can give rise to a presumption or even an inference that the two units should be treated as one unit. I have already quoted above the various authorities cited by the learned counsel for the petitioner, of various High Courts and the Tribunal wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat if there is no evidence to prove that there was mutuality of business interest or there was flow back of funds from one unit to another, it is not possible to hold that clearances of two units could be clubbed. The Hon'ble Rajasthan High Court in the case of Renu Tandon v. Union of India - 1993 (66) E.L.T. 375. (in the facts, two units were situated in the same premises, manufacturing similar products, having common management, having common office and labour, having common electric connection and one unit was owned by father-in-law and other by daughter-in-law and both the units were being looked after by husband.) held that value of clearances could be clubbed unless mutuality of interest in the business of each other is proved by the Revenue. In this case the Revenue has failed to prove through evidence that there is a mutuality of interest. Reliance in the case of Modi Alkalies by the DR is of no help to the facts of this case as in that case the facts are somehow different which are reproduced hereunder :- M/s. Modi Alkalies & Chemicals Ltd. (in short MACL) is engaged in the manufacture of caustic soda of which Hydrogen gas is a by-product. The Central Excise Authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef Operating Officer of MACL admitted that some amount of cash was also collected by MACL over and above the invoice prices of Hydrogen gas supplied by three companies. It was noted that while front companies were being supplied gas by MACL @ 0.50 per unit, till August 1996, the same gas was sold by the three companies @ Rs. 5/- per unit. Keeping in view all these factors the authorities were of the view that MACL had created the three companies with the fraudulent intention to avail benefit of exemption granted under Central Excise Notification No. 1/93, dated 28-2-1993 and has mis- declared the assessable value in the invoices with the intention to evade central excise duty. The facts in the case of Modi Alkalies are different from the case in hand before us as in the case of Modi Alkalies (supra) the main company and three separate companies were incorporated. All the four companies in the same factory premises and they are having common pipeline. Directors of the three companies were the employees of Modi Alkalies and they were frequently changed. There were common staff and common plant and machinery. The finances of those companies were provided by Modi as unsecured loan an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be one of the important considerations, it could not be made the sole basis for arriving at the decision, this way or that way. While the determining factor for clubbing of clearances is the true nature of relationship as between different units, the facts and circumstances of each case had to be appreciated. On the basis of the specific facts in a particular case, after the conclusions have been drawn, the case law could be cited to support the conclusions; but such a matter which largely depends upon the facts and circumstances relevant to the issue, no decision could be arrived at only on the basis of decisions in other cases with facts and circumstances specific to them." 12. Admittedly the issue of clubbing or declaring dummy units should be examined in the light of facts of each case. In the case in hand, the constitution of firms is Private Limited and Partnership Firm, therefore, merely being a one person is common in all the units cannot be a ground for clubbing the clearances of all units. Further, all the units were having separate registration with Central Excise department, different Sales Tax registration, ESIC etc. and having different trademarks and filing th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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