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TMI Blog2019 (8) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench - Final Order No. 71560-71563/2019 - Dated:- 19-8-2019 - Mrs. ARCHANA WADHWA, MEMBER (JUDICIAL) And Mr. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri Praveen Sharma, Advocate for Appellant Shri Shiv Pratap Singh, Authorized Representative for Respondent ORDER ARCHANA WADHWA All the four appeals are being disposed of by a common order as they arise out of the same set of facts and circumstances. M/s ABC Technologies (hereinafter referred to as M/s ABC) are engaged in the manufacture of various sheet metal parts, mechanized components, laser cutting, bending and machine on job work for others and is registered with the Central Excise Department for payment of duty of excise. They are regularly discharging their duty liabilities. Shri V.K. Gupta is the partner in the said M/s ABC. M/s Siddhant Engineering is engaged in the manufacture of couplers and kiosks and were availing the benefit of small scale exemption Notification No. 8/2003 and as such are not registered with the Central Excise Department. Shri V.K. Gupta and Shri S.P. Gupta are the directors in the said M/s S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found in the factory of ABC; process of bending and welding required for manufacture of Kiosks done in the factory of ABC; working of both the entities monitored by Mr. V.K. Gupta and hence no manufacturing activity in Siddhant. 5. The appellants in their written submissions have taken the following grounds: 1. M/s Siddhant has independent fully functional factory with all the required machines and trained labour (refer panchnama statement of SP Gupta recorded on the spot-pages 63 to 69). Manufacturing operations were going on in the factory at the time of visit of the officers. Material found at various stages of the manufacturing process. Raw material such as MS Rods, Rounds, plates, flanges and scrap generated during manufacturing operations also found in the factory. Finished and semi-finished couplers found in the factory premises. All these materials were seized as detailed in panchnama. Thus M/s Siddhant had a fully functional factory with purchase of raw material, labour, machinery required where the goods in questions were manufactured. 2. Separate registrations with VAT, labour and other departments as well as income t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered manufacturer were not applicable. Further, substantive benefit cannot be denied for any procedural lapse. 9. The figures of power consumption of ABC relied upon in the SCN has no relevance. The figures of power consumption have been taken in terms of value and not units. The unit cost of power increases with every year and for the same production, the value of power consumed will increase each year. Further, turnover includes the job charges also in which the value of power consumed will be much more than the manufactured goods, as it will not have any raw material cost. 10. There was no allegation or any evidence of any financial integration. The working of both the entities was separated right from the stage of procurement of raw material, machinery required, labour employed, manufacturing operations, sale of finished goods and receipt of the sale proceeds. 11. No evidence that the threading operations on CNC machine were done before April, 2013 in the factory of ABC. The CNC machine was purchased only in April, 2012. No enquiry or any investigation was ever made by the officers about the fact that for how long, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere. The order in original admits that this may have been the reason for shifting of some of the machinery (para 25). Therefore, all the operations for manufacture of couplers were done by Siddhant in its factory till March, 2013. The demand upto March, 2013 is not sustainable. 7. From April, 2013 onwards, whenever the demand was high, semi-finished couplers were sent to the premises of ABC for threading on CNC machine and packing on job work basis. After packing, the couplers were dispatched by Siddhant on their own invoices from there and duly accounted for in its books of accounts. Job charges were paid to ABC on which service tax liability was discharged by ABC. Also, the raw material for Kiosks were sent for operations of bending and welding and thereafter returned back for further manufacturing. In November, the CNC machine was shifted back to the factory of Siddhant. A manufacturer can send the semi finished goods for further processing to another person and this is permissible under the law. 8. The working of Siddhant was controlled by Mr. SP Gupta, as also found at the time of visit. Mr. VK Gupta only looked after sales and taxation matte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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