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TMI Blog2003 (10) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... l being minors were admitted to the benefit of the partnership and the partnership deeds were reduced to writing regarding these firms. They became partners, being natural heirs of the deceased founders of both the firms. Therefore, it could not be said that they intentionally formed the constitution of both the firms, in such a manner, with intent to defraud the Revenue. They even informed about this change in the firms to the Department. More over, even thereafter, both the firms had remained engaged in the manufacture of different products detailed above which were being manufactured when the original proprietor/partners were alive. No doubt business is being conducted by Anurag Aggarwal, Rachna Aggarwal and Sashi Aggarwal of both the firms after the death of original proprietor/partners, but from this no irresistable conclusion could be drawn that both the firms virtually constitute one unit in the eyes of law, especially when both still stand registered separately from the very inception, with the Central Excise and Sales Tax, Income Tax authorities separately, and there is no proof of flow back of money from one firm to another. There is also no evidence to prove that both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and 2 are not distinct firms but constitute one firm under the law and that the Commissioner has wrongly raised presumption about the oneness of both these firms on the simple ground that the partners therein are common. Such a presumption according to the learned Counsel, could not be raised for want of any evidence to show the flowback of money from one firm to another or of having common employees, suppliers of raw materials and similarity in the products being manufactured by them. He has further contended that even the show cause notice issued is defective as in a case of clubbing duty could not be demanded from both the firms if one was dummy according to the Department. The duly also could not be confirmed on both of the firms severally and jointly as done by the Commissioner through the impugned order. The Counsel has placed reliance, to substantiate his arguments, on the ratio of law laid down in Assistant Collector of Central Excise and Customs v. J.C. Shah - 1978 (2) E.L.T. (J317) (S.C.), G.D. Industrial Engineers, Faridabad v. Collector of Customs and Central Excise - 1983 (14) E.L.T. 1994, Jindal Electricals & Another v. CCE, Chandigarh - 2003 (156) E.L.T. 429 (T) = ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was common, but the firm, P.K. Industries (appellant No. 1) was charging electricity expenses from the other firm. This factor obviously, without any other evidence to prove that one of these firms was a dummy unit, could not be made basis for ordering clubbing the clearances of both the firms. Even the Commissioner in the impugned order has not laid much emphasis on the same as he had solely ordered the clubbing of the clearances of these firms merely on the ground that the partners are common who have got mutuality of interest in both the firms. 6.It is also evident from the record that only on 9-11-97, when the tragedy struck the family on account of death of P.K. Aggarwal, proprietor of firm, appellant No. 1 and also of Manoj Aggarwal, one of the partners along with P.K. Aggarwal, in the firm appellant No. 2, in a car accident, the constitution of both the firms stood changed. In the firm, appellant No. 1, Smt. Sashi Aggarwal (Widow), Anurag Aggarwal, son of P.K. Aggarwal became partners, while the other two minor sons Tarun Aggarwal and Arjun Aggarwal were admitted to the benefit of the partnership. Similarly, in firm appellant No. 2, due to death of both the partners, Manoj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner in any of the three firms is distinct from each of the three firms and vice versa. Each of the three firms is separate and distinct from the other two and also distinct from the individual partners composing them, although they are identical. Once this is so, it cannot be said that the manufacturer in each of the three appeals is identical just because the three appellants are having common partners, although admittedly, their shares vary and they are not one firm but three separate firms each having separate independent existence. Nor can it be held that each individual partner in all the three firms is a manufacturer. If that were so, the exemption limit would become applicable to each one of the partners. Therefore, the goods cleared by them cannot be treated as a collective entity for the purpose of extending the benefit in Notification No. 89/79 or 105/80. Further, if instead of one or two common partners, all the partners of three firms are common, still all the three firms will be treated separate and distinct firms." 9.Therefore, keeping in view the ratio of law laid down in the above referred cases and the facts and circumstances detailed above, the firms appellants N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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