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TMI Blog2017 (11) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in record by taking separate registrations under sales tax/ income tax etc. They were also filing separate declarations every year to Central Excise authorities claiming that their turnover was below the SSI limit. However, the investigation has established that all units though were shown to have separate de jure existence but the de fecto contract was with Sh. Ram Niwas Jindal - in the eye of law, it alone cannot be ground to deny the benefit of SSI exemption - the turnover of all the units need not be clubbed. Use of brand name - allegation of clearance of goods by JSW bearing the brand name belonging to HSW - Held that: - the allegation that the goods cleared to HSW were bearing the brand names of the later is not substantiated by corroborated evidence - appellants were not marking the finished goods supplied to HSW with the brand names, “Hindware” or Rassi”. They were initially mentioning the model number of the products manufactured for supply of HSW. Such marks such as “BTT”, “BTJ”, etc. cannot be considered as brand names in the absence of any investigation to prove the name mentioned on such labels was brand name or name of another person - there is no justification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Singh Wazir, Partner of M/s Super Plast. Similar instances were quoted in respect of raw material supplied by M/s Super Plast to M.s Century Polytech. Similar allegations were made against M/s Ganesh Udyog also. c. Based on a register Image reflecting clandestine clearance amounting to ₹ 1,01,49,780/- under the brand name Jindal owned by JSW, allegations of clandestine manufacture and removal were also made against JSW. Sh. Anil Goyal of M/s Century Polytech also admitted that the bath tubs available in his unit was manufactured by M/s Sunshine. d. M/s Ganesh was clandestinely clearing the goods to the assembling godown of JSW and M/s Sunshine. The proprietor of M/s Ganesh stated that all the goods manufactured in his unit were packed with Jindal brand and transferred to godown of JSW/ M/s Sunshine. e. The packing material (card board boxes) were with the brand names Jindal and Malpline as well as Sun Plast which was registered brand of JSW and Sunshine. f. All the purchase orders were addressed to Sh. R. N. Jindal. Sh. Gautam Ghosal of Hindustan Sanitaryware confirmed common procurement from the group. Sh. Anil Saxena of M.s Shine Polyme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he branded goods worth ₹ 9,77,89,637/- was cleared from all the units of the group during last five years i.e. from 2002-03 to 2006-07 to M/s HSW after availing the benefit of SSI exemption. The department has also concluded that from years 2004-05 to 2006-07 the SSI benefit was not available to JSW. 3.9 The Revenue finally concluded that other than JSW all units were dummy and hence, the clearances by all units are to be considered as clearance from M/s JSW. 3.10 Accordingly, duty of ₹ 3,13,16,833/- and Education Cess ₹ 4,33,534/- was demanded from JSW. This included the liability against all the units. Penalty was also proposed against the JSW under Section 11AC read with Rule 25 of the Central Excise Rules, 2002 and penalty was also proposed on other individuals of various units under Rule 26. 3.11 Vide order-in-original dated 22.12.2008 the adjudicating authority confirmed the demand on JSW as proposed in the show cause notice, imposed equal amount of penalty under Section 11AC of the Act and also imposed penalty of ₹ 50 lakhs on Sh. R. N. Jindal under Rule 26. He also imposed penalty of ₹ 10 lakhs each on Sh. Ajay Kumar Jindal, Raj Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s placing orders for each of the units, ensure supply of goods from each unit, help those units in getting raw material at reasonable rate and represent this unit to the outsides. (f) In the present case, all units are separate and are either proprietorship or partnership. They have separate establishment and separate registration with the authorities concerned; they have also been filing regular declaration to the department. All of them had the infrastructure including machines to manufacture goods. They had separate power supply, separate manpower and purchased raw material according to their need. (g) The claim of the department that the raw material was procured only by Sh. R. N. Jindal and payment was made by him is not substantiated by the evidence available on record. The appellant would refer to bank statements of all the units to show that each unit has paid for the raw material which they have received. It may be true that Sh. R. N. Jindal negotiated with the supplier to purchase the raw material for all units but in all cases the cost of the raw material was paid by individuals units which is reflected in the bank statement of the relevant period. (h) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... names such as Hindware and Rassi which belong to HSW. The goods were bearing short abbreviations such as BTT BTJ, BTI etc. which was nothing but accronym indicating different models. It is also his submission that HSW were in no way connected with the availing of SSI exemption by JSW and their group companies. As a buyer it is not their obligation to question the seller about SSI exemption. As such, he submitted that the penalty imposed under Rule 26 HSW is not justified. 6. We heard both sides and perused record. 7. A table showing the various units covered in the present case is given below for ready reference: Sl. No. Name Address of the Group Units Name of the Prop. / Partner Relationship with Sh. R. N. Jindal Products 1 M/s Jindal Sanitary Works (JSW), T-5/241, Mangolpuri Indl. Area, Phase-I, Delhi Sh. Ram Niwas Jindal, Proprietor Self Cisterns and parts thereof, seat covers 2 M/s Sun Shine Industries (SS) T-5/241, Mangolpuri Indl. Area, Phas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Ganesh Udyog (GU) T-2/201, Mangolpuri Indl. Area, Phase-I, Delhi Sh Raj Kumar Jindal, Proprietor Elder Brother Cistern and other platic accessories, Corner Mirror frames, Seat covers 3 M/s Century Poly Tech (CPT) 262, Swarn Park, Udyog Nagar, Mundaka, Delhi Sh. Anil Kumar Goyal, Proprietor Brother-in-law Acrylic Bath Tubs Kitchen Sinks 4 M/s Super Plast (India) 265, Swarn Park, Udyog Nagar, Mundaka, Delhi Smt. Pushpa Rani, Partner (60%) Sh. Vipan S. Wazir, Partner (10%) Wife Water tanks 5 M/s Vishal Plastic (VP) 129, Sector-5, Bawana Indl. Area, Delhi-39. Smt. Sarla Devi, Proprietor Sister Seat covers for toilet etc. On the basis of certain kachha parchis recovered during search, it has also been alleged that clandestine clearances were made in respect of goods covered under the kachha parchi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the full infrastructure to manufacture the goods they were shown to make. The final assembly of goods said to be manufactured in different units. For moving the goods from one unit to another unit, some times, kachhi parchies were used. There is no clear evidence of flow back of funds among the units. All these evidences lead to an escapable conclusion that all the units were having separate existence in record by taking separate registrations under sales tax/ income tax etc. They were also filing separate declarations every year to Central Excise authorities claiming that their turnover was below the SSI limit. However, the investigation has established that all units though were shown to have separate de jure existence but the de fecto contract was with Sh. Ram Niwas Jindal. But in the eye of law, it alone cannot be ground to deny the benefit of SSI exemption. 15. In these circumstances, we are of the view that the finding of the adjudicating authority that the turnover of all the units was required to be clubbed for the purposes of SSI exemption cannot be justified. 16. Now we turn to the allegation of clearance of goods by JSW bearing the brand name belonging to HSW. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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