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TMI Blog2004 (4) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... otice issued to the appellants after completing the investigation that, the said three units do not have any independent manufacturing capabilities and are completely dependent on the appellant's unit. The proposal was therefore to club the clearance of all the four units and consequently, it was alleged that the concessional excise duty benefit for small-scale units enjoyed by M/s. Special Machines under Notification No. 175/86-C.E., dated 1-3-86 was not available to them. Hence duty of Rs. 78,55,951/- was demanded and confirmed against them and penalty of Rs. 5 lakhs was imposed under Rule 173Q. The appellants are challenging the findings contained in the said order, through the instant appeal. 2.The show cause notice that has been issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture welding electrodes. The said unit only manufactures coating powder/chemicals (Flux Powder) which is used for manufacture of welding electrodes. 5.In the order-in-original, the following points have been enumerated in support of the proposal for clubbing the clearances of Special Machines (SM) with those of the remaining three units, namely, (i) Industrial Products (ii) Modern Equipment, and (iii) S.M. Welding Electrodes (hereafter referred to as "three units") (i) It is alleged that the Special Machines have contravened the provisions of Notification No. 175/86-C.E., dated 1-3-86, as they failed to include the clearances of the three units in their clearances and consequently rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; S/Shree R. M. Jain and Vitap Jain are the main operators and other family members are merely dummies. In other words, the allegation is that all the three units were dummies. Hence the clearances made by the three units are required to be added to the clearances made by S.M. and hence the case for demanding duty. 6.The appellants have challenged the demands on various grounds. However, keeping in view the order we are proposing to pass, with reference to the main issue of clubbing the challenge to the duty demand with reference to several other grounds including the ground of limitation, and the ground that approved classification list having not been reviewed etc. are not being examined by us. 7.We note that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re ground of composition of the firms comprising of common partners or the same individual figuring in the capacity of the Director on one firm and partner in the other cannot be a ground to treat three companies as part of the appellant's company. 11.On going through the allegations levelled in the show cause notice on the basis of investigations and the evidence brought on record, it is noted that the proposal for clubbing is based, solely on the grounds that the three units are situated within the vicinity of the appellant's unit, there is very flexible/loose arrangement relating to deployment of staff from one unit to the other. The R.& D facility of S.M. is being freely used by the other three units as also the wire drawing capacity. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal has relied upon the judgment of the Hon'ble High Court of Rajasthan in the case of Renu Tandon v. UOI - 1993 (66) E.L.T. 375 (Raj.) in dealing with the similar situation to hold that clubbing is not permissible unless there is an evidence of financial flow back. The judgment is reported in 2000 (119) E.L.T. 703 (T) in the case of CCE, New Delhi v. Standard Watch Company. In the case of Bentex Industries v. CCE, New Delhi reported in 2003 (151) E.L.T. 695 (Tri.-Del.) more or less similar view has been taken. 14.In another case reported in 2002 (139) E.L.T. 295 (T) Delhi in the case of Poly Printers v. CCE, Delhi, it has been held by the Tribunal that concept of 'related person' under erstwhile Section 4(4)(c) of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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