9911796707
TMI Blog2001 (8) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by them during the year 1996-97 in terms of proviso to Section 11A(1) of Central Excise Act, 1944. (iii) An amount of penalty of Rs. 6,56,250/- shall be paid by M/s. Agarwal Rubber Pvt. Ltd. under Section 11AC of Central Excise Act, 1944 read with Rule 173Q of Central Excise Rules, 1944 as discussed in Para (22) supra. (iv) Interest @ 24% per annum on the duty determined as above at (ii) shall be paid by M/s. Agarwal Rubber (P) Ltd. under Section 11AB vide Notification No. 8/2000-C.E, (N.T.), dt. 1-3-2000 . (v) An amount of duty of Rs. 54,38,792/- shall be paid by M/s. TM Tyres and Tubes Pvt. Ltd., Kallakal Village being the Central Excise Duly short paid by them during the period from 1997-98 to 1999-2000 (upto 11/99) in terms of proviso to Section 11A(1) of Central Excise Act, 1944. (vi) An amount of penalty of Rs. 57,10,732/- shall be paid by M/s. TM Tyres and Tubes Pvt. Ltd. under Section 11AC of Central Excise Act, 1944 read with Rule 173Q of Central Excise Rules, 1944 as discussed in Para (22) supra. (vii) Interest @ 24% per annum on the duty determined as above at (v) sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. He submits that there is fundamental error in the show cause notice in as much as that once the Revenue have proceeded on the basis that all the four units are not independent and required to be clubbed as there was mutuality of interest and its main unit who is alleged to be the king pin in floating other four units, then demands ought to have been raised against the principal unit i.e. Agarwal Rubber Pvt. Ltd., as has been held by the Apex Court in the case of Gajanan Fabrics Distributors v. CCE, Pune reported in [1997 (92) E.L.T. 451 (S.C.)]. On this prima facie consideration, and on the plea that the Commissioner in Para 10 has stated that large number of judgments are not applicable itself shows total non-application of mind as the law on the aspect of clubbing of various units have been explicitly expounded by the Tribunal and the Apex Court and High Courts in large number of judgments. The Commissioner ought to have applied his mind further in the matter. The order is totally a non-speaking order and in view of fundamental error in the show cause notice itself appeals are required to be allowed at this prima facie stage by grant of waiver of duty and stay of its recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of MR with the assistance of Ramesh Kumar Agarwal, Executive Director of ARPL and Partner of RE and managers and staff of ARPL, ¨ Supervision and control of Ramesh Kumar Agarwal, Executive Director of ARPL and Partner of RE over procurement of raw material for MR and RE and marketing of products of MR and RE, and ¨ Overall control and supervision of production, sales, finances and other related matters of all the companies i.e. ARPL, MR, TMTTPL and RE by Deendayal Agarwal, Managing Director of ARPL and TMTTPL and Managing Partner of MR and RE. 4. On a specific query from the Bench and to the arguments on the fundamental error in the show cause notice, in the light of the Apex Court judgment of Gajanan Fabrics Distributors v. CCE, Pune reported in [1997 (92) E.L.T. 451 (S.C.)] pointed out by ld. Counsel and various judgments, ld. DR submits that all these matters are required to be seen only at the final stage, when he will be in a position to get the report from the Commissioner and at this stage, he reiterates the findings recorded by the ld. Commissioner in his order. 5. On a careful consideration of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erabad I Commissionerate, L.B. Stadium Road, Basheerbagh, Hyderabad - 500004 (hereinafter referred to as Adjudicating Authority) within thirty days from the date of receipt of this notice as to why : (i) all the four units namely, ARPL, TMTTPL, MR and RE should not be treated as one entity and the value of clearances of all the units should not be clubbed for arriving at aggregate value of clearances for the purpose of determining the eligibility for extending the benefits under Notifications 1/93, 16/97, 8/98 and 8/99 issued from time to time, and benefits should not be denied for the reasons discussed in the Statement of Grounds; (ii) an amount of Rs. 6,25,000/- being the Central Excise duty short paid by ARPL during the year 1996-97 (as detailed in Annexure A 1), should not be paid by ARPL in terms of Rule 9(2) of Central Excise Rules, 1944 read with proviso to sub-section 1 of Section 11A of Central Excise Act, 1944; (iii) a penalty should not be imposed on them in terms of Rules 9(2), 52A(8), 173Q and 226 of Central Excise Rules, 1944 for contravening the provisions of Rules 9(1), 52A, 173F, 173G and 226 of ibid; (iv) penalty equivalent to duty demanded in Para (ii) above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued from time to time, and benefits should not be denied for the reasons discussed in the Statement of Grounds; (ii) an amount of Rs. 22,48,460/- being the Central Excise duty not paid by them during the period 1995 to Nov, 1999 (as detailed in Annexure A2) should not be paid by them in terms of Rule 9(2) of Central Excise Rules, 1944 read with proviso to sub-section (1) of Section 11A of Central Excise Act, 1944; (iii) penalty should not be imposed on them in terms of Rules 9(2), 52A(8), 173Q and 226 of Central Excise Rules, 1944 for contravening the provisions of Rules 9(1), 52A, 173B, 173C, 173F, 173G, 174 and 226 of ibid; (iv) penalty equivalent to duty demanded in Para (ii) above should not be imposed under Section 11AC of Central Excise Act, 1944; (v) interest as applicable on the duty demanded at Para (ii) above should not be levied in terms of Section 11AB of Central Excise Act, 1944. We notice from the above paragraphs that it clearly indicates that Agarwal Rubber Pvt. Ltd. were required to show cause as to why all the four units should not be clubbed and treated as one entity and the value of clearances of all the units should not be clubbed for arriving at the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to have been raised on the first unit, who is alleged to have floated other units and is operating through them with mutuality of interest. 8. The further argument raised by the Counsel was that the ld. Commissioner has proceeded to confirm the demands by invoking Section 370 of the Companies Act which has since been omitted in 1999, for the purpose of analysing the concept of "Companies Under the Mismanagement". Ld. Counsel submits that this Section 370 of the Companies Act is enacted in a different context and cannot be invoked for the purpose of clubbing of clearances. He further submits that even the said section was not in existence as it had been omitted from the statute book and therefore relying on that section is bad in law, and the order is unsustainable. 9. We notice that there is lot of substance and force in the Counsel's submission. Therefore, we grant waiver of pre-deposit and stay the recoveries. 10. As we find that there is non-applicability of mind in the matter, and the order is not in the light of various judgments recorded by the Apex Court and the Tribunal and the Commissioner in Para 10 having held them to be not applicable which, in our opinion, is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
