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TMI Blog2018 (9) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... ishra ( AR ) ORDER Per: Raju These appeals have been filed by M/s Alpha Converting Machines Pvt. Ltd. and Sh. Rajan M. David, Director of the said company against confirmation of demand of Central Excise and imposition of penalty by clubbing clearances of various units. 2. Ld. Counsel for the appellant pointed out that M/s Alpha Converting Machines Pvt. Ltd. was started in 1997 and Sh. Rajan David is one of the Director of the Company. The said company exports entire production. They obtained sales tax registration in 2001. M/s Alpha Flexible Machinery owned by Sh. Rajan David a proprietorship concern obtained its sales tax registration on 01.07.2002. M/s Alpha Convert Machines Industries was stared in 2003 as a partnership firm where Sh. Rajan David is a partner. M/s Alpha Converting Machines Industries obtained sales tax registration on 20.10.2003. The factory of the appellant was searched on 01/02.Feb.2006 and worksheets was prepared taking clearances of all three, namely, M/s Alpha Converting Machines Pvt. Ltd., M/s Alpha Flexible Machinery and M/s Alpha Convert Machines Industries and a demand of ₹ 9,82,487/- was worked out for the year 2004-2005. All thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries and denying exemption under Notification 08/2003 to clearances of M/s M/s Alpha Flexible Machinery and M/s Alpha Convert Machines Industries on the ground that there was common use of land and building and plant and machinery, common electrical power connection, interest free flow of funds, non-maintenance of separate accounts for raw material consumption. It was alleged that there was only one unit operating in the said premises. On 29.08.2008, Sh. Rajan David retracted his statement dated 02.02.2006 by filing an affidavit. 6. Ld. Counsel for the appellant argued that all three entities were separate legal persons carrying different independent. He argued that they maintained separate books of accounts of balance sheet had obtained separate registration from state and central sales tax authorities. He pointed out that they had separate Certificates and registration under Companies Act, separate bank accounts and separate registration certificate from Ahmedabad Municipal Corporation. He argued sharing common premises, power or occasional financial transaction is not enough for clubbing the clearance of units. He argued that the financial transactions were duly entered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production were being maintained. The power connection were common for all the entities. When, however, Sh. Rajan David was asked to produce the bills of the machinery purchased, he could not do so on the pretext that the machineries were old. In his submission dated 07.01.2008, he admitted that he uses the machines for manufacture of the goods irrespective of its ownership. He also admitted that he issued raw material of production as per requirement and that factory shed belong to him and no payment of rent towards use of land and building and plant and machinery was made by M/s Alpha Converting Machines Pvt. Ltd. He also admitted that they had one single electric connection. When he was asked to explain the various financial transaction between the different entities, he could not explain any. In these circumstances, the Revenue confirmed the demand of excise duty by clubbing. Notification 8/2003-CE dated 01.03.2003 relates to SSI Exemption. The said notification exempts following from Central Excise duty. Table S. No Value of clearances Rate of duty (1) (2) (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their own. All the transactions of all the 3 entities were being made by Sh. Rajan David. The buyers also knew only Sh. Rajan David. In these circumstances, the only conclusion that can be reached is that there was only one factory belonging to M/s Alpha Converting Machines Pvt. Ltd. which came in existence in 1997. Thereafter entities namely, M/s Alpha Flexible Machinery and M/s Alpha Convert Machines Industries were created on paper without any manufacturing facility to show clearances and to avail small scale benefit. The Ld. Counsel has relied on the decision in case of Sree Nirmal Spinners 2014 (300) ELT 469 (Tri. Chen.). In the said case the appellant showed payment on conversion charges, lease rent for use of machinery. The allegation in the said case was based essentially on the ground that the partners belong to same family. In the said case also the appellant had separate electricity connection, shed as well as machinery. In the instant case, however, there is no separate electricity connection and there is no machinery owned by the dummy units. Moreover, there was no evidence in the said case regarding financial flow back whereas in the instant case the appellant has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh. The principal factor that leads us to this conclusion is the finding of the Collector, upheld by the Tribunal, that the seven units which are the appellants before us are only a corporate facade although registered with the various authorities with a view to camouflage their actual identity and thereby avail of the exemption which, otherwise, would be inadmissible to them . The Tribunal failed to give due attention to the fact that the Collector had confirmed, in the sum of ₹ 11,84,708.51, the demand made in the show cause notices upon all seven units and their partners or Directors. Having regard to his conclusion that all units other than Gajanan Weaving Mills were fictitious units, the sequitur, one would have assumed could only be that it was Gajanan Weaving Mills which was the assessee and liable to satisfy the demand. By confirming the demand upon all the seven units the Collector appears, however, to have treated them all as assessees and, implicitly recognised their independent existence. 14. Ld. AR had argued that demand can only be confirmed against the entity which is not dummy entity as held by Hon ble Apex Court. He argued that in these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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