TMI Blog2024 (4) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... is found that all the units have their own separate and independent existence. M/s Precision Equipment Co. was a proprietorship firm of Shri Rajubhai Jaisinghani, M/s Pratik Enterprises was a proprietorship firm of Shri Bhagubhai Prajapati, M/s Precision Industries was a proprietorship firm of Shri Prembhai Manuskhani and M/s Precision Rotogravure pvt. Ltd. had three directors viz. (i) Rajubhai Jaisinghani, Shri Bhagubhai Prajapati and Shri Prembhai Mansukhani. Separate Locations, Central Sale Tax Registration Certificate, Gujarat Commercial Tax Registration Certificate, separate Electricity Meters and separate Bank Accounts. Appellants also produced before us their separate profit loss accounts, balance sheets, Audit reports, VAT return filed by them, sample bank account statements, purchase accounts and sales accounts. In the present matter it is admitted fact by the revenue itself that M/s Precision Industries had bought raw materials and got finished goods manufactured on Job Work Basis. The Job Workers had also accepted that they had done job work of M/s Precision Industries also. The officers had also visited the premises of all units and found that all the units have separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the records withdrawn under various panchnama as well as produced by the appellants , others and the oral evidences collected in the form of statements and other documents from the suppliers of raw materials, job workers and buyers of finished goods and on scrutiny of all the private records it appears that all the goods so sold under the invoices of M/s Precision Equipment Co., Vatva, M/s. Pratik Enterprises, Vatva, M/s Precision Rotogravure Pvt. Ltd. and M/s Precisions Industries, Sajipur Bogha were actually manufactured by M/s Precision Equipment Co., Vatva, as evident from the statement of the suppliers, job workers and buyers. Thus, as per the provisions of Notification 8/2003-CE dated 01.03.2003, as amended, the aggregate clearance value of M/s. Precision Equipment Co. Vatva would also include the value of the goods sold under the invoices of M/s. Pratik Enterprises, M/s. Precision Rotogravure Pvt. Ltd. and M/s Precisions Industries, Saijpur Bogha, Ahmedabad. M/s Precision Equipment Co., Vatva had so evaded the Central Excise Duty on the clearances exceeding Rs. 1 Crore /Rs. 1.5 crore. After the detail investigation, Show Cause Notices were served to the appellants, propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries was a proprietorship firm of Shri Prembhai Manushkhani and (iv) M/s Precision Rotogravure Pvt. Ltd. had there directors viz. (i) Rajubhai Jaisinghani, (ii) Bhagubhai Prajapati and (iii) Prembhai Mansukhani. Therefore, it is nobody s case that all the units had common proprietor or that all the partners of one unit were only the partner of another unit. Thus, in a situation like this where there are different proprietors for different units, clubbing of clearance for the purpose of SSI Exemption Notification is not sustainable. Likewise, it is settled law that a company/private limited company has a different entity and its clearances cannot be clubbed with proprietorship or partnership firms. 2.1 He also submits that the period in dispute is from F.Y. 2006-07 to 2011-12. M/s Precision Rotogravure Pvt. Ltd. was incorporated only in Feb. 2010. A factory was started by the said private limited company for manufacturing goods only thereafter. Manufacture and clearance of the goods from the factory of said private limited company commenced only after 01.04.2010. A perusal of show cause notice would show that a worksheet is attached which shows period wise clearance made by eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision Industries, he submits that although it was not having a separate factory premise, it was purchasing raw material, getting the goods manufactured on job work basis from the other units and was finally selling/ clearing their final product. All the units had separate bank accounts. There was no financial flow back. As the three units were proprietorship firms of three different individuals, they were assessed to income tax separately. They had separate identity. There was no mutuality of interest. They had separate manufacturing facility, separate staff, separate workers, separate electricity connections, and separate machinery. As regard the company M/s Precision Rotogravure Pvt. Ltd. the proprietors of each of three units were directors of the company. However it is a settled law that clearances of a company cannot be clubbed with the clearance of firms for the purpose of computing threshold limits. The company had its own factory premises. The said company had commenced working from April 2010 onwards i.e. at the end of the period in dispute. Said company was having their own setup, machineries, labourers, workers, employees, staff, machinery, etc. 2.4 He also argued that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground alone, the impugned order deserves to be quashed and set aside. 2.7 He also submits that when units are public/private limited companies, incorporated under the Companies Act, they are to be considered independent entity under the Companies Act, they are to be considered as separate units and their clearance could not be clubbed. He placed reliance on the following judgments:- Pimpri Gases Vs. CCE -1990 (49)ELT 474 (T) Commissioner of C.Ex., Surat I Vs. Goyal Fibers (P) Ltd. 2009(234)ELT 108 (Tri. Ahmedabad) 2.8 As regard the confiscation and redemption fine he submits that it is settled law that confiscation and redemption are not imposable when goods are not available for seizure. In the present case, said goods are not seized, therefore in that view of the matter, the redemption fine is completely illegal. He placed reliance on the following judgments:- Commissioner of Customs (Import) , Mumbai Vs. Finesse Creation Inc. -2009(248)ELT 122(Bom) Commissioner Vs. Finesse Creation Inc, 2010(255)ELT A120 (SC) Shiwalaya Spinning Weaving Mills (P) Ltd. Vs. CCE, Amritsar -2011(274)ELT 306 (Tri. Del.) 3. Shri A.K. Mudvel, Learned Superintendent (Authorised Representative) appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured by it, then, sale proceeds of clearances should flow to M/s. Precision Equipment Co. However, there is no any financial flow back of funds, department have not even produced single evidence of any such financial flow back of funds from one firm to other firms and also vice versa. Further, as regard the allegation of the revenue that M/s Precision Industries not having manufacturing facility, hence dummy unit. We noticed that law permit manufacture of goods on job work basis. In the present matter it is admitted fact by the revenue itself that M/s Precision Industries had bought raw materials and got finished goods manufactured on Job Work Basis. The Job Workers had also accepted that they had done job work of M/s Precision Industries also. The officers had also visited the premises of all units and found that all the units have separate existence and have separate premises and independent electricity connection etc. Some processes were being done outside the premises on job work basis by the said units, which were also confirmed by the job workers. 4.2 We also find that various government departments granted separate registrations to them after ascertaining their correctne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their premises are adjoining to each other, the benefit of SSI exemption cannot be denied. Further, Tribunal in the case of Alpha Toyo Ltd. v. CCE, New Delhi, 1994 (71) E.L.T. 689 (Tri.) observed that even though there is a common management control and common Directors and finance of the firm lies with the main unit, SSI exemption cannot be denied. However, instant case of appellants is on better footing, maintenance of books of accounts and returns of all the firms are separate. Units have not only separate infrastructure, but also separate existence in the eye of law. We, are therefore of the view that denial of benefit of SSI Exemption to the manufacturer appellants is not sustainable. 4.5 As regard the issue of confiscation of the goods and imposition of redemption fine, we agree with the argument of appellant that no seizure of goods were made. Therefore, confiscation of the goods which were not available is not legal and correct, therefore consequently redemption fine was not warranted as held in the Larger Bench s judgment in the case of Shiv Kripa Ispat Pvt. Ltd. - 2009 (235) E.L.T. 623 (T-LB) which was affirmed by the Hon ble Bombay High Court in 2015 (318) E.L.T. A259 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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