9911796707
TMI Blog2008 (8) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... DR for the Revenue. 3. We heard both the sides. 4. The proceedings were initiated against the appellants on the ground that they had suppressed the production of the goods and also the clearances of both the units had to be clubbed for the purposes of SSI exemption. In other words, there was a proposal to club the clearances of two partnership units who are the appellants, M/s. Rao Industries and M/s. Rao Trailors. Both of them are partnership units, The show cause notice proposed to club the clearances of both the units and to deny the SSI exemption. Consequently proceedings were initiated and the duty was confirmed, but there is no identification as to which is the real unit and which is the dummy unit. That is not forthcoming in the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te relied on several case laws which are as follows:- S/No. Case Laws Ratio or gist of the decision. 1. Gajanan Fabrics Distributors [1997 (92) E.L.T. 451 (S.C.)] When the Collector had confirmed duty on all the seven units, the Collector had treated them all as assessees and implicitly recognized their independent existence. 2. CCE v. Shiva Exim Enterprises [2005 (185) E.L.T. 169 (T)] Clubbing of clearances of two units can be ordered only if one unit is the principal unit while other is a dummy one which had been floated with a view to camouflage clearances of principal unit. Duty in that event can be demanded only from the principal unit and not from both units. When duty was demanded from both units, it would lead to an inferen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions without interest between manufacturers is no conclusive evidence of the fact that the clearances were for and on behalf of others. 8. CCE v. Saint Laboratories [2006 (201) E.L.T. 85 (T)] When Unit-2 was in existence as a registered unit and was independently assessed and the said unit was paying sales tax and other duties, the value of clearances cannot be clubbed. 9. Renu Tandon v. UOI [1993 (66) E.L.T. 375 (Raj.)] In the absence of evidence of common funding and financial flow back, two units not treatable as one and the same mere because two units situated at same premises, manufacturing similar product, common management, office and labour, etc. 10. P. K. Industries v. CCE [2004 (163) E.L.T. 204 (T)] When duty deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eds maximum value allowed. There should always be a correct identification of the real unit or the dummy unit. This has not been done. Both the Order-in-Original as well as the Order-in-Appeal had demanded the duty on both the partnership units and also imposed penalty on the third appellant. This is a fundamental flaw and at this stage, this cannot be cured. When the Revenue has failed to identify real and dummy units and when the demand has been confirmed on both the units, such an order cannot be legally sustained. There is no merit in the impugned order. Therefore on this ground alone, we are inclined to set aside the impugned order and allow the appeals.
(Pronounced in the open court on 13-8-2008) X X X X Extracts X X X X X X X X Extracts X X X X
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