9911796707
TMI Blog2017 (12) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... at will not by itself make the unit a dummy unit. The appellant has strongly contended that there was no flow back of money or sharing of profit. They have also submitted that the illustrations of fund transfer shown in show cause notice were only temporary funds paid by M/s. Airflow to M/s. Bala and the same was paid back. The department has mainly relied on these few illustrations and has not taken or considered the entire transactions. On perusal of record this argument is not without substance - matter requires reconsideration. The matter is remanded to the adjudicating authority for denovo adjudication - appeal allowed by way of remand. - E/412 to 414/2007 - Final Order Nos.43007-43009 / 2017 - Dated:- 26-7-2017 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri M. Karthikeyan, Advocate for the Appellants Shri S. Govindarajan, AC (AR) for the Respondent ORDER Per Bench The appellant namely M/s. Airflow Equipments India Pvt. Ltd. (hereinafter referred to as M/s. Airflow) are manufacturers of grills, dampers, diffusers etc. of aluminum used in the centralized air-conditioning system and aluminum door ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of central excise duty and confirmed demand of duty of ₹ 10,79,216/- along with interest and imposed equal penalty besides imposing separate penalty of Rs. One lakh each on the other appellants. M/s. Airflow was also given the benefit of CENVAT duty credit on the inputs to the tune of ₹ 3,30,596/- which was ordered to be adjusted against the duty demand. Being aggrieved by the above order, the appellants filed appeals before Commissioner (Appeals) who upheld the clubbing of clearances of both the units as well as the duty demand and the penalty imposed under section 11AC of Central Excise Act, 1944. However, he set aside the penalty of Rs. One lakh imposed on M/s. Airflow. Hence, appellants are now before the Tribunal. 5. On behalf of the appellants, ld. counsel Shri M. Karthikeyan reiterated the grounds of appeal and made oral submissions, which are summarized as under- (i) M/s. Airflow is a private limited company and M/s. Bala is a sole proprietary concern. That the clearances of M/s. Airflow which is a private limited company cannot be clubbed with the sole proprietary concern as the company is a separate legal entity. He relied upon the CBEC Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Airflow but the same has been paid back by M/s. Bala to M/s. Airflow which is nothing but a commercial transaction. These are reflected in the ledger accounts of the premises. That such transactions are nothing but short-time borrowings which have been paid back in due course of business. That therefore this cannot be a ground to hold that the value of clearances of M/s. Bala has to be clubbed with that of M/s. Airflow. Other than this commercial loans which were paid back, the notice does not allege any flow back of profit from one unit to another which is most essential ingredient for clubbing the value of clearances of two existing units. That in the absence of evidence, the department has clubbed the clearances of both the units thereby denying the benefit of SSI exemption to M/s. Airflow. (vi) The ld. counsel contends that the authorities below have not gone into the details of the accounts as well as transactions. It would clearly show that the appellant has been able to explain the transactions as well as the alleged cash flow in the show cause notice. It is stressed by the ld. Counsel that the authorities have not appreciated the evidence in its entirety and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment from the customers contain huge values. Again periodical transfer of money from M/s. Bala's bank account to M/s. Airflow's bank account was being done while records show that M/s. Bala is selling aluminum products to M/s. Airflow. Such flow back of cash would squarely evidence that M/s. Bala is a dummy unit. That therefore the clubbing of the value of clearances of both the units done by the authorities below and the confirmation of duty and penalties imposed is legal and proper. 7. Heard both sides. 8. The gist of allegations raised is that M/s. Airflow was not registered with Central Excise Department and was wrongly availing SSI benefit under the notification by suppressing its value of clearances by clearing goods through another unit M/s. Bala. M/s. Airflow is a private limited company and M/s Bala is a proprietorship concern. According to the department, M/s, Bala is a dummy unit of M/s Airflow. Admittedly M/s. Bala has a separate sales tax registration and is a separate income tax assessee. Thus it is a separate unit before all public authorities for compliance of various laws. Shri G. Dakshina Moorthy the father of Sh. D. Ventakesh who is managing directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices of Bala, both accounted by Bala and not accounted by Bala, are taken into account for quantification of duty. (b) The clearances made from Air Flow, both accounted and not accounted are taken into account for computation of duty. (c) Wherever the figures are available, the value of clearances is arrived at after deducting the amount of sales tax paid thereon. (d) The value of clearances of Air Flow and Bala are clubbed for the reasons stated in pre pages. (e) The value of clearances are arrived at for each financial year in the way mentioned above, the duty is arrived at after giving the due exemption of Rs. One crore for the SSI limit. 10. M/s. Bala has supplied goods to M/s. Air Care Engineers, and M/s. Adit Association. The purchase orders to these customers were placed by M/s. Bala and the invoices were also raised in the name of M/s. Bala. The payments were received in the account of M/s. Bala. Only because these invoices contained the signature of D. Venkatesan, the department alleges that the goods are actually supplied by Airflow and no goods have been supplied by M/s. Bala. Again, in regard to M/s. Ambassador Pallava, the payments are receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest free loan is not sufficient to hold the units as a dummy unit in the absence of any flow back and / or profit sharing. The said decision was affirmed by Hon ble Supreme Court as reported in 2015 (321) ELT A46 (SC). The appellant has strongly contended that there was no flow back of money or sharing of profit. They have also submitted that the illustrations of fund transfer shown in show cause notice were only temporary funds paid by M/s. Airflow to M/s. Bala and the same was paid back. The department has mainly relied on these few illustrations and has not taken or considered the entire transactions. On perusal of record this argument is not without substance. In our view, the facts require reconsideration and we deem it fit to remand the matter to the adjudicating authority, leaving all issues open. 12. In the result, the impugned order is set aside and the matter is remanded to the adjudicating authority for denovo adjudication who shall give reasonable opportunity to the appellant for furnishing evidence and personal hearing. The appeal is allowed by way of remand. ( Operative portion of the order was pronounced in open court ) - - TaxTMI - TMITax - Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
