TMI Blog1998 (12) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, there is common financial involvement and common control and supervision in respect of both the units. They are not independent units claimed by them. Therefore, the clearances of both the units are to be clubbed. The Commissioner therefore confirmed a demand of Rs. 68,727/- and also held that the said amount should be paid along with interest. The Commissioner also imposed a penalty of Rs. 68,000/- on M/s. Indian Metal Industries, Cuttack. Being aggrieved by this order the appellants have filed the appeal before us. 2. The facts of the case briefly stated are that M/s. Indian Metal Industries and M/s. National Castings and Engineering Co. are manufacturers of H.G. Fuses and A.B. Switches falling under Chapter Heading 85.35 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be clubbed as there was financial flow back and common funding of both the units by the same source. In the show cause notice they were asked to explain as to why Central Excise duty amounting to Rs. 68,727/- should not be demanded for the period 1987-88 to 1989-90 and penalty should not be imposed. In reply to show cause notice the appellants submitted that M/s. Indian Metal Industries was initially started as a proprietary concern; that in 1982 a partnership firm was constituted; that the partnership was effective from 30-3-1981; that both the units were being run as two different partnership firms; that M/s. I.M.I. was registered as an S.S.I. Unit with the Directorate of Industries since 6-2-1976 and also registered with the Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. They also denied other allegations. 4. Shri S.K. Mohanty, ld. Counsel appearing for the appellants submits that there was no common funding nor was there any flow back of money from one unit to the other. He submitted that the two units was separate entities having two separate Central Excise Registration Certificate, two S.S.I. Certificates from the Director of the Industries, different Sales Tax registration by the two different units; different Income Tax registration by the two units. He submitted that thus the existence of the two units is established beyond any doubt. He submitted that each unit was maintaining its cash book separately and there was nothing common insofar as the records were concerned. He submitted that certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. The ld. Counsel submitted that in their case also some staff is common but the fact remains that the units are independent of each other and there was no common funding or flow back of resources from one unit to the other. And thus the ratio of this decision is attractible to this case. The Counsel also refers to the judgment of this Tribunal in the case of Rang Udyog v. C.C.E. - 1996 (83) E.L.T. 648 in which the Tribunal held that the units are two partnership firms having separate Income Tax and Sales Tax registration and also registered as S.S.I. Unit; that expenses of both the units were incurred from different sources without any flow back of funds from one to the other; that inter-relationship of partners, common workers, commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not paid for some job work we may not be able to come to the conclusion that they are financially inter-linked. Because in the case of units set up by family members it becomes inevitable that they use machines of each other for carrying out part of the job in the production line. The Counsel submitted that in their case the facts are similar to the one analysed and decided by the Tribunal and therefore submitted that the ratio of the decision squarely covers their case and that the clearances of the two units should not be clubbed. 6. The Counsel also relied on the decision of this Tribunal in the case of Gita Engineering (P) Ltd. v. C.C.E. - 1996 (87) E.L.T. 672. In this case the Tribunal held that irrespective of the fact that same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was common funding and financial flow back, the clearances of the two units shall have necessarily to be clubbed for purposes of allowing the exemption or clubbing duty. He therefore submitted that the appeal may be rejected. 8. We have considered the submissions made from both the sides. We have perused the case law cited. On careful consideration of the submissions made we find that no doubt the galvanising plant is common, but as the clearances are not being effected on behalf of the other person, but were being effected by the two units separately, therefore this factor alone is not sufficient to prove that one unit was the dummy unit of the other and therefore the clearances of the two units should be clubbed. 9. The test act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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