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TMI Blog2018 (11) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... /s DST") and M/s K.C. Pipes Pvt Ltd. (in short "M/s KCP") were engaged in the manufacture of ERW pipes. They were registered with the Central Excise Department and availing the benefit of exemption Notification No. 9/98-CE dt. 09.06.1998, 9/2000-CE dt. 01.03.2000 and 9/2001-CE dt. 01.03.2001. They were availing Cenvat credit in respect of the duty paid on the inputs used in the manufacture of their final products i.e. ERW pipes. On the basis of the intelligence that M/s DST and M/s KCP had been indulging in clandestine clearance of ERW pipes manufactured in their factory and M/s DST had also been clearing the EWR pipes manufactured by them under the invoices of M/s Kapoor Chand Krishan Lal (in short "M/s KCKL"), the officers of DGCEI conducted investigation against M/s DST and M/s KCP. As a result of investigation, it was alleged that both the units have evaded central excise duty during the period from 06.11.1998 to July, 2004. Therefore, various show cause notices were issued to the appellants demanding duty by clubbing the clearances of both the units and on the account of clandestine removal of the goods by M/s DST on the invoices of M/s KCKL. The matter was adjudicated and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2002. "Re. SCN C.No. V(Ch.73)/D/63/2002/1180 dt. 30.06.2003 (i) I confirm the demand of Rs. 5,51,680/- against M/s K.C. Pipes Pvt Ltd under Section 11A of the Act alongwith interest at the applicable rates in terms of Section 11AB of the Act. (ii) I impose penalty of Rs. 5,51,680/- on M/s K.C. Pipes Pvt Ltd under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002. "Re. SCN C.No. V(15)SCN/47/2004/384-385 dt. 08.07.2004 (i) I confirm the demand of Rs. 5,51,719/- against M/s Dharam Steel Tubes Pvt Ltd under Section 11A of the Act alongwith interest at the applicable rates in terms of Section 11AB of the Act. (ii) I confirm the demand of Rs. 5,51,678/- against M/s K.C. Pipes Pvt Ltd under Section 11A of the Act alongwith interest at the applicable rates in terms of Section 11AB of the Act. (iii) I impose penalty of Rs. 5,51,719/- on M/s Dharam Steel Tubes Pvt Ltd under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002. (iv) I impose penalty of Rs. 5,51,678/- on M/s K.C. Pipes Pvt Ltd under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002. "Re. SCN C.No. V(15)SCN/82/2005/387-388 dt. 30.06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed their independent existent. In support of his contention, he relied upon the decisions of this Tribunal in the cases of Bentex Industries vs. CCE - 2003 (151) ELT 695 (Tri.) and CCE vs. Shiva Exim Enterprises - 2005 (185) ELT 169 (Tri. Delhi), which has been affirmed by the Hon'ble Apex Court reported in 2015 (322) ELT A32 (SC). 4.2 He also submits that there is no mutuality of interest and unconscionable fund flow between the two companies, therefore, their clearances cannot be clubbed in the light of the decisions of this Tribunal in the cases of Bullows India Pvt Ltd. vs. CCE - 2012 (284) ELT 584 (Tri.) and Ennar Cements Pvt Ltd. vs. CCE - 2013 (292) ELT 245 (Tri.). 4.3 He also submits that in the case of Nova Industries Pvt Ltd. vs. CCE - 2015 (327) ELT 103 (Tri.), this Tribunal held that as both companies are separately registered under Central Excise, Sales Tax and Service Tax, have separate machinery and premises, separate work force and only one common employee, both the units are independent, therefore, their clearances are not liable to be clubbed. 4.4 Ld. Counsel also relied on the following case laws:- - Devilal Kutir Soap vs. CCE - 2016 (340) ELT 258 (Tri.) - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the impugned order is to be set aside. 5. On the other hand, Ld. AR supports the impugned order and submits that both the units i.e. M/s DST and M/s KCP are owned by Sh. Shiv Kumar Goel and Sh. Yash Pal Goel who are managing both the firms, therefore, their clearances have been clubbed together to demand duty by allowing SSI exemption. It is his further submission that during the course of cross examination of Sh. Rahul Jain, it has been established that M/s KCKL have no existent, therefore, demand on account of clearances has also confirmed. It is also submitted by Ld. AR that the cross examinations of the witnesses namely Sh. Vijay Singh, Sh. Ashok Kumar and Sh. Dalip Singh could not be granted as these people did not appear for cross examination. In these circumstances, in terms of Section 9D(1), their statements can be relied upon. 6. Heard the parties and considered the submissions. 7. On careful consideration of submissions made by both the parties, we find that demand has been confirmed by the issuance of various show cause notice to the appellants on account of clubbing of their clearances and on account of clandestine clearance of goods by M/s DST on the invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of SSI on the ground that they were using the brand name of another person who was not entitled to the benefit of said exemption. The Commissioner even had already in that show cause notice confirmed the duty demand against both of them. This also goes long way to prove that the Excise Department had accepted both these companies as independent/separate identities and units. This circumstance, in fact, debars the Department from now taking somersault and to plead that only one company is the main unit while the other is a dummy one." 7.3 Further, in the case of CCE vs. Shiva Exim Enterprises (supra), this Tribunal has held as under:- "3. It can hardly be denied that the clubbing of the clearances of two units can be ordered, only if one unit is the principal unit while the other is a dummy one which had been floated with a view to camouflage the clearances of the principal unit. The duty in that event can be only demanded from the principal unit and not from both the units. Where the duty has been demanded from both the units, it would rather lead to an inference that the Revenue has recognized implicitly both of them as independent units. This proposition of law flows from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue. Moreover, the other witnesses whose statements have been relied upon, were not cross examined despite the direction of this Tribunal, therefore, the statements of these witnesses are not admissible to allege the clandestine removal of the goods. Further, we take note of the fact that to establish clandestine clearances of the goods, this Tribunal in the case of Arya Fibres Pvt Ltd. (supra) has laid down certain parameters, which are extracted herein below:- "40. After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following : (i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) instances of actual removal of unaccounted finished goods (not inferential or assumed) from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present appeals were concluded), once again reiterated the same principles, after considering the entire caselaw on the subject [Hindustan Machines v. CCE [2013 (294) E.L.T. 43]. Members of Bench having hearing initially differed, the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. We are not going into it in detail, since the learned Counsels on either side may not have had the opportunity of examining the decision in the light of the facts of the present case. Suffice it to say that the said decision has also tabulated the entire case-law, including most of the decisions cited before us now, considered them, and come to the above conclusion. In yet another decision of a co-ordinate Bench of the Tribunal [Pan Parag India v. CCE, 2013 (291) E.L.T. 81], it has been held that the theory of preponderance of probability would be applicable only when there are strong evidences heading only to one and only one conclusion of clandestine activities. The said theory, cannot be adopted in cases of weak evidences of a doubtful nature. Where to manufacture huge quantities of final products the assessee require al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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