TMI Blog2000 (8) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... same unit having been floated by one Sounderarajan of M/s. Brinda Industrials by floating two other units in the name of Brinda Engg. works, proprietor V. Duraisamy and M/s. Brinda Enterprises, Proprietrix Smt. S. Latha. Penalty of Rs. 1,50,000/- has been imposed on M/s. Brinda Industrials under Rule 173Q and 226 besides penalty of Rs. 10,00,000/- each on the other two appellants under Rule 229 of the CE Rules. Clearances for the years 1990-91,1991-92,1992-93 and 1994-95 have been taken for the purpose of clubbing the value of the clearances of all these three units. 2. Brief facts of the case are that the authorities visited the premises of M/s. Brinda Industrials on 15-9-1994 and found that three sets of invoices were used for clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of exemption. It was stated that they were receiving machine parts from the customers for repairs and what was done in the unit was only repair activity. It was also contended that in some cases they were supplying raw materials to job workers who carried out the independent activity and were paid job work charges. The goods which came from job workers were in finished form and they were cleared to the respective customers and hence there was only trading activity. However, these pleas were negatived by the Commissioner on the ground that the appellants had single power connection or one generator and there was no sub-meter and that Sounderarajan in his statement admitted the offence and he voluntarily paid Rs. 75,000/- towards dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence of flow back. He further submits that all these units had been separately registered under the SSI and they had separate trading activity and had been functioning as independent units. The accounts had been audited and there was no financial flow back from one unit to the other unit and hence the finding arrived at that the other two units are dummy units is not correct in terms of the various judgments of the Tribunal, High Court and the Supreme Court. He cites a large number of judgments to prove that commonality of power connection is not enough for clubbing clearances unless mutuality of interest and financial flow back are brought on record. He further submits that there was no allegation and no finding by the Revenue that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... created the other two units for the purpose of records. Therefore, the other units were dummy units and there was no activity of trading or manufacture by other units in terms of the records maintained by them. The seized records disclosed that the activity was carried out by Sounderarajan of M/s. Brinda Industrials and there was bifurcation of units without any separate electrical meter and hence the entire clearances made by the appellants have to be taken as a single clearance. He points out that Sounderarajan was only clearing raw material to independent job workers who carried out single processing of manufacture and the entire manufacturing activity was done by Sounderarajan of Brinda Industrials and the authorities have clearly inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the place, therefore, in order to avoid arrest, he had deposited the amount of Rs. 75,000/-. It is contended that the records itself would disclose that there was only trading activity and there was evidence available to show that what was received from the job workers was directly handed over to the customers. Their further contention is that they received old parts also for repairs and the seized records itself would disclose this aspect of the matter. Their further contention is that the Commissioner ought to have determined the correct classification of each of the item and arrived at the value after giving deductions. On consideration of these additional arguments of the learned Counsel, we find that there is sufficient force in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dummy units and were not in existence. The Commissioner should have examined the issue in detail and also scrutinized the evidence on record with regard to the existence of the units and whether they were independent or only on paper as dummy units. Since these pleas raised by the appellants including the deduction available under Section 4(4)(d)(ii) and other deductions have not been gone into, therefore, the impugned order is not a speaking order. In view of this, we are constrained to set aside the impugned order and remand the matter to the original authority for de novo consideration, who shall grant a full opportunity to the appellants to demonstrate that all these three units are independent units and that the appellant Sounderaraja ..... X X X X Extracts X X X X X X X X Extracts X X X X
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