TMI Blog1993 (10) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the main charge against the appellant is that appellant Dharamdeep Properzi and Alloys Pvt. Ltd. cleared without payment of duty 213.030 kgs. of DPC wires classifiable under 8544 of the Central Excise Tariff and also 3039 kgs. of insulated conductor valued at Rs. 1,19,912.05. The further ground of charge is that appellant Nikhildeep Cables (P) Ltd., was set up by appellant Dharamdeep Properzi and Alloys Pvt. Ltd. only for the purpose of availing the benefit of small scale exemption Notification 175/86 dated 1-3-1986, as amended and therefore, the clearances of both the units should be clubbed together and in that view differential duty was demanded. The learned Counsel contended that the entire impugned order is passed purely on surmise without considering vital piece of evidence in support of the plea that both the units are separate entities and do not have any common financial interests inter se and are having independent manufacturing activities of goods with their own machineries with relevant excise licence falling under different tariff headings functioning under the territorial supervision of the same Range Supdt. and Asstt. Collector of Central Excise. It was su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written submissions were filed along with case laws and unfortunately the adjudicating authority has not considered any of them and merely dismissed the appellants case by a vague and general observation in para 20 of the impugned order. 4. Shri Subramanian, the learned DR submitted that if the Tribunal feels that the relevant piece of evidence and the case laws cited by the appellants have not been considered in the impugned order the Tribunal may remand the matter for reconsideration. 5. We have considered the submissions made before us and gone through the entire records. The only question that falls for our main consideration in the appeals is as to whether the clearances of both the units should be clubbed together for the purpose of levy of differential duty on the ground that appellant Nikhildeep Cables was only created for the purpose of availing the benefit of small scale exemption Notification 175/86. It is well settled law that in circumstances where such allegation is levelled against two units the primary consideration that would weigh with the adjudicating authority is as to whether there is mutuality of financial interest between the two units inter se and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned adjudicating authority and in para 18 only a cryptic observation in this regard is made as under : ...Above all, there has been flow of financial accommodation over a period of time. As we noted earlier, the financial transaction is at a time when the benefit of Notification 175/86 was never applicable to either of the units and as stated earlier taking into consideration the large volume of turnover of both the units and payment of duty at the nominal tariff rate and non-applicability of Notification 175/86, the main charge that appellant Nikhildeep Cables was constituted for the purpose of availing the benefit of exemption notification is not sustainable either in law or on facts. The Special Bench of the Tribunal in the case of M/s. Swastik Engineering Works v. CCE, reported in 1992 (62) E.L.T. 313 has clearly held that clubbing of clearances of various units are not permissible for reason of commonality or close relationship of partners and sharing of common facilities unless ownership of unit by another; production control and flow back of profit is clearly proved. We also refer in this context the larger Bench ruling of the Tribunal in the case of M/s. Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common funding and financial flow back is missing and therefore, to withdraw the assessment or club the clearances is wholly unjustified and illegal and without jurisdiction. Reference in this connection may be made to International Dyestuff Mfg. Co. v. Collector of Central Excise, Baroda -1991 (53) E.L.T. 85 (Tribunal). We further note that the Special Bench ruling of the Tribunal in the case of M/s. Vivomed Labs (P) Ltd. v. CCE, reported in 1991 (53) E.L.T. 152 was upheld by the Supreme Court in Civil Appeal No. 2709-14/92 dated 21-9-1992 and the Supreme Court has observed as under : ... The Appellate Tribunal further held that where the units are registered separately under the Income Tax Act and Sales tax having separate Central Excise licences and also financed through separate application for loan from financial institutions, the clubbing of clearances of these units is not maintainable in law in the absence of conclusive evidence of financial flow back among them. 6. We therefore, note that the evidence on record clearly bears out the following factors in the present case : (i) The two units have been separately licensed and are functioning under two different pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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