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TMI Blog2025 (2) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... t, all proceedings initiated against the principal unit would be vitiated. The above said proposition is a question of trite law emanating from above cited rulings which can be raised at any time. Therefore, the Learned Commissioner (Appeals) has clearly erred in denying them the benefit of legal proportion as indicated by appellants which mostly developed later. As things stand today, it is fairly well settled that the show cause notice is required to be issued both to Principal unit as well as alleged dummy unit. Same having been done by the department, the case against principal unit cannot stand. The violation of GIDC agreement, if at all exists is a matter between GIDC and the appellants. Apart from, the above proposition additionally the overwhelming evidence indicates that M/s Macons Engineers was a unit in existence duly documented by various agencies and statement under Section 14 if any to the contrary cannot be given precedence over such documentary evidence. Conclusion - i) The proceedings against a principal unit cannot stand without issuing a Show-cause Notice to the alleged dummy unit. ii) The documentary evidence presented by M/s Maxocrete Equipments sufficientl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are totally separate. Appellant (M/& Maxocrete Equipments) had given a sub-plot no, 37/C A out of plot no. 37/C on lease (rent) to M/s Macons Engineers vide rent agreement dated 21.06.2023. During the period in dispute, M/s Maxocrete Equipments was registered under the Central Excise whereas M/s Macons Engineers was not registered. Subsequently. M/s Macons Engineers was shifted to another premises, where it was separately registered under Central Excise. After investigations, Show-cause Notice was issued demanding duty in regard to the clearances made by M/s Macons Engineers that to from M/s Maxocrete Equipments. 2. M/s Macons Engineers is a proprietorship firm of Mr. Ramniklal Narandas Surelia and was separately registered as a manufacturer. It was registered with the District Industries Centre, Gujarat Sales Tax Department, Central Sales Tax Department, Income Tax Department, etc. Copies of various certificates are part the appeal memorandum Likewise, the factory of the appellant was separately registered with the Central Excise Department. They were two separate units. Demand with regard to the goods manufactured and cleared by one unit cannot as per the appellants be made fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared a dummy unit. In the present case, none of these are done. Therefore, the appeal deserves to be allowed and the impugned order deserves to be quashed and set aside. 3.3 Further, reliance is placed on the statement of the proprietor of the appellant wherein he is said to have stated that only one unit existed in the registered factory premises of appellant. It is submitted that the same is not correct. The aforesaid documentary evidences as well as the panchnama drawn by the department itself speaks volume about the fact that M/s Macons Engineers were a separate unit and that clearances were made by the said separate unit. The very case of the department itself is that the clearances made by the M/s Macons Engineers were made under separate invoice against separate purchase order issued to M/s Macons Engineers. Copies of various invoices of M/s Macons Engineers along with copies of purchased order issued by various buyers of cleared goods which were also seized during the course of investigation. It is submitted that it is a settled law that documentary evidence prevails over oral evidence. Said submission finds support from the following judgement: R.P. Industries versus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly rejected. 3.2 The unit has relied on the decision in the case of M/s. Escorts JCB Ltd. 200 (118) ELT 650 (T) to emphasize their point that discretion should be exercised while imposing penalty under Section 11AC of the CEA, 1944 and that it is not mandatory to impose penalty equivalent to the duty amount. I do not agree with the plea made by the unit. It has been held by the larger bench of the Tribunal in the case of CCE V/s. M/s. ILPEA PARAMOUNT (P) LTD. 2007 (213) ELT 500 (Tri-LB) that the interpretation that only maximum penalty is indicated in Section 11AC & discretion is given to impose any lesser penalty thereunder is incorrect. Accordingly, penalty equivalent to the amount of duty has to be imposed under the provisions of Section 11AC of the Act. 3.3 The partner, Shri Harishbhai Surelia, partner of M/s. Maxòcrete Equipments has pleaded reliance on the Tribunal decisions in the case of (1) Shree Tirumala Udyog and others V/s. C.C., Banglore reported in 1998 (77) ECR 169 (1), (2) Harish Dying & Printing V/s. Commissioner, Central Excise, Surat-l reported in 2001 (138) ELT 772 (Tri-Mum) and (3) B.C. Sharma V/s. CCE, Jaipur reported in 2000 (122) ELT 158 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were available in the certified unit of M/s Macons Engineers. M/s Macons Engineers was also granted a PAN Card Registration Bearing No. AAMFM 1572F in ITO wARD 6(4) Ahmedabad. This Court find that Vide Order No. A/10176-10177/2017 dated 24.01.2007 CESTAT remitted back the matter to the Commissioner (Appeals) with the following direction: "Therefore in our opinion, matter needs to be remitted the Learned Commissioner (Appeals) to record the finding whether the appellant could be allowed to raise the said point of clubbing of both units on merit, and if so, consider on merit accordingly. All issues are kept open, the appeals are allowed by way or remand". In this context pursuant to the above direction of the Hon'ble Tribunal, the Commissioner (Appeals) passed the following order (extracted below): "However, rather than contesting, the appellant consequent to paying the entire amount demanded in the notice, requested only for cum duty benefit. Since the appellant had never questioned the clubbing of the clearances of M/s Macon with his own clearances, this plea raised before Commissioner(Appeals) assumes the colour of an additional evidence and therefore in terms of Rule 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find the plea to be true. Even otherwise, the admission of the partner of the appellant that there was no such unit as M/s. Macon in existence; that the only unit that existed in the premises was M/s. Maxocrete Equipments, that M/s. Macons was a proprietary concern of his father Shri Ramnikbhai Surelia and actually there was no physical existence of M/s. Macons; that the entire plot 37/C was utilized by M/s. Maxocrete Equipments only. I find has never been retracted. The contention of the appellant that M/s. Macons was carrying out activities at the relevant point of time at the premises in question and the departmental officers have forced Mr. Hitesh to make statement to the effect that M/s. Macons was not existence as he was threatened with arrest and dire consequences, is not true more so because if it was he could very well have filed his retraction. Further, I find that Shri Hitesh, partner of the appellant, appeared on behalf of his father to give statement, which would not have been the case had the statement recorded earlier was under duress. It is also worth noting that Shri Hitesh Surelia, reiterated the same facts in his statement dated 27.7.2006 and 11.6.2007, clearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the production of M/s Maxocrete Equipments and being a registered central excise premise no any other unit could operate from the same premises. Therefore, it appears that M/s Maxocrete Equipments have floated another firm in the name and style of M/s Macons Engineers having no physical existence. For this purpose, they have simply assigned their own plot number, created documents like rent agreement for use of infrastructures facilities available and plant & machineries installed in the factory premises, prepared and issued sales invoices in the name and style of M/s Macons Engineers and maintained all required records etc. As such, it appears that M/s Maxocrete Equipments have suppressed the actual production from the department. Shri Hiteshbhai R. Surelia in his statement dated 27.07.06 has very categorically admitted that there was no such unit in existence in the name and style of M/s Macons Equipments and the entire Plot No. 37/C was the factory premises of M/s Maxocrete Equipments only. Further Shri Hiteshbhai has also confirmed that M/s Manufactured by M/s Maxocrete Equipments without payment of duty ". 7.1 That the unit of M/s Macons Engineers was considered as a dumm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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