TMI Blog1996 (3) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... anjit is also their Chairman. The registered office of all these units is at the same address at Nariman Point, Bombay. All of them hold Central Excise licences and are availing of exemption under Notification No. 175/86 for small scale industries based on value of clearances in a financial year. The authorised, issued and paid up capital of the various units, which are private limited companies, and the share holdings (which is confined to Ranjit Bhavnani and his wife, and their own firm R.B. Chemicals Agro Industries) are as follows : M/s. H.T. Bhavnani Chemicals Pvt. Ltd. : (a) Company Shares : Authorised Capital : Rs. 10,00,000.00 Issued Paid-up Capital (Rs. 100/- per share) : Rs. 4,65,000.00 (b) Share-holders Mrs. Ranjit H. Bhavnani Mrs. Mala R. Bhavnani M/s. R.B. Chemicals Agro Industries (P) Ltd., Bombay. : : : Rs. 2,05,000.00 Rs. 1,45,000.00 Rs. 1,15,000.00 Rs. 4,65,000.00 M/s. L.B. Fine Chemicals Pvt. Ltd. : (a) Company Shares : Authorised Capital : Rs. 5,00,000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ranjit Bhavnani also gave a statement during enquiry saying that as a Director, he decides the overall policies of the units and that he visits the units once in 2-3 months. Sh. Suresh Gandhi stationed at Bulsar, visits their Bombay office two to three times a month to coordinate the work relating to the units with one Purshottam Barwal of the Bombay office. 3. As a result of the enquiries, proceedings were initiated against the appellants, herein, alleging that the four appellant units have two common Directors, namely, Sh. Smt. Ranjit Bhavnani and Ranjit Bhavnani is the person managing all the four units and they have set up in one common plot at Sarigam, Bulsar, three units out of four, producing the same goods and that there are common employees controlling the various activities of the four units; so, one set of Directors have set up more than one small scale unit and the clearances of the said four units are, therefore, to be clubbed for determining eligibility to exemption under Notification No. 175/86 from the financial years 1986-87 upto November, 1990 and, when so clubbed, for the financial year 1988-89 and 1989-90 the said four units become ineligible for the exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .B. Fine Chemicals and Calibre Chemicals. The chemist doing quality control and the employee looking after Central Excise work in all the 3 units at Bulsar is common. Sh. Bhavnani also visits Bulsar and exercises control. Therefore, it is clear that there is total identity of interest among the units which are all under the effective control and direction of Sh. Bhavnani and his wife. 7. It is this aspect of identity of interest as between partnership firm which was stressed by the Supreme Court in the case of Mohanlal Maganlal Bhavsar v. U.O.I. - 1986 (23) E.L.T. 3 in a case of valuation under Section 4 of Central Excises Salt Act, 1944. The contention before the Court was that in determining the assessable value of the goods the price at which the petitioner sold the goods to their chief distributor, M/s. N.B. Bhavsar Sons should have been adopted and not the wholesale price at which the goods were sold. The Supreme Court, however, observed that Bhavsar Sons, though a separate partnership firm, was in fact a firm in which not only the original appellants were partners, but a son of each of them was also a partner. There was thus identity of interest, held the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different and yet the nature of the business may be the same, the business may be different and yet the partners may be the same. An agreement between the partners to carry on a business and share its profits may be followed by a separate agreement between the same partners to carry on another business and share the profits therein. The intention may be to constitute two separate partnerships and, therefore, two distinct firms. . . . It will depend on the intention of the partners. The intention of the partners will have to be decided with reference to the terms of the agreement and all the surrounding circumstances including evidence as to the interlacing or interlocking of management, finance and other incidents of the respective business . 9. The intention in the present case in constituting the other separate units by the same husband and wife duo is to carry on the same business of manufacturing. Management of the firms is by the same two persons and finances by way of share capital is provided by them only in differing proportions in each firm. They are set up to manufacture the same product pottassium iodate. The appellants have not put forth any commercial reason why the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... call upon the other units to answer the charges and for demanding duty as well to impose penalty, yet para 14 of show cause notice sets out the provisions violated by the other units and alleges that they have wrongly availed the benefit of exemption Notification No. 175/86 and the consequences thereof. The substance of the charges against the units having been so spelt out the absence of the proper form of the narration of charges is not material. Moreover, all the units have furnished detailed replies to the show cause notice which shows that the substance of the charges against them therein was clearly understood. Therefore, there is no force in this contention. 13. On the question of limitation, there is substance in the contention that the longer period for demanding duty under Section 11A Central Excises Salt Act, 1944 is not attracted in this case because all the three units in Bulsar are located adjacent to each other and fall under the jurisdiction of the same assessment Range and Division under the same Assistant Commissioner. Central Excise licences in Form L4 had been issued to the units by the Assistant Commissioner based on their application in which the names an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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