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TMI Blog2004 (3) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... facturing identical excisable goods specified under SSI exemption Notification No. 1/93-C.E., dated 28-2-93; that the Panchkula unit availed the benefit of exemption under the said Notification during the period July, 1994 to May, 1995; that, on the basis of their Classification List for the years 1994-95 and 1995-96 as also of statements of Shri M.K. Aggarwal and Shri Pradeep Agarwala, the department found that the Panchkula unit of the firm had fraudulently evaded Central Excise duty to the tune of Rs. 3,01.518/- by suppressing aggregate value of clearances of the goods (i.e., by not including the sister unit's clearances in the aggregate value in terms of the above Notification) and had contravened various provisions of the Central Excise Rules, 1944; that a show cause notice dated 2-8-99 was issued by the Department to the Panchkula unit and partners of the firm for recovery of the above amount of duty for the period July, 1994 to May, 1995 as well as for imposition of penalties on the firm and its partners; that the proposals in the show cause notice were contested by the noticees; that, in adjudication of the dispute, the jurisdictional Additional Commissioner of Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 187] (iv) CCE v. Sethia Foods [2003 (156) E.L.T. 395] 4.Ld. SDR submitted that the Panchkula and Bhatinda units belonged to the same partnership firm. There could not be two different partnership firms with the same firm-name, of the same partners, holding shares in the same ratio. DR argued that, on the facts and evidence on record, the Panchkula and Bhatinda units were liable to be held to have been run by the same partnership firm viz. Jaybee Industries and, for that matter, liable to be held to have had mutuality of interest between them and, therefore, the clearances of the two units were liable to be clubbed for purposes of the SSI Notification. He also pointed out that the appellants had not even produced separate partnership deeds, if any, to prove their claim that the two units belonged to two different partnership firms distinct and separate for Central Excise purposes. In his bid to dislodge the Counsel's plea that the two units were distinct entities for Central Excise purposes, ld. SDR relied on the following decisions :- (i) H.T. Bhavnani Chemicals (P) Ltd. v. CCE [1997 (92) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide Malabar Fisheries (supra). The Court examined the English, Scottish and Indian laws on partnership and held that the position as regards the nature of a firm and its property under the Indian Partnership Act, 1932 was almost the same as in English law and, therefore, in Indian law, a partnership firm was not a distinct legal entity and the partnership property belonged to all the partners constituting the firm. In the earlier case of Dulichand Laxminarayan (supra), the Supreme Court had held that a firm was not an entity or person in law but merely an association of individuals and that a firm-name was only a collective name of those individuals who constituted the firm. Therefore, in the instant case, "Jaybee Industries" was the collective name of the two partners who constituted the firm with equal shares. Had Shri M.K. Aggarwal and Shri Pradeep Agarwala had another firm of theirs, such a firm would have been differently constituted (i.e., with unequal shares) and differently named. We think that this view of ours can claim firm support from the Apex Court's decision in Dulichand Laxminarayan (supra), which was followed in the case of Rashik Lal & Co. (supra), wherein it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s partners. The interest of the firm in the manufacturing activity of the two units was not anything different from the collective interest of the partners in the said activity. Admittedly, both the partners were equally interested in the business of each unit. Mutuality of interest between the two units was inbuilt in such a dispensation. The Tribunal's decision in D.M. Gears (supra), wherein it was held that mutuality of interest between two manufacturing units belonging to two companies required to be established for the purpose of clubbing of clearances under SSI Notification, cannot be applicable to such a situation. 7.We, therefore, hold that the Panchkula and Bhatinda units were only two factories run by the same partnership firm and the clearances from both the units were liable to be clubbed in terms of Paragraph (3) of Notification No. 1/93-C.E., which reads : "Nothing contained in this Notification shall apply, if the aggregate value of clearance of all excisable goods for home consumption. (i) by a manufacturer from one or more factories, or (ii) from any factory, by one or mor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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