TMI Blog2000 (11) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-1990. The office of the appellants situated at Townhall Road and the factory premises housed in a rented portion of property owned by Shri Bhanwarlal at Village Metro where manufacturing activity of stitching of HDPE bags was being carried out and factory premises of M/s. Udaipur Phosphates Fertilizers were searched. During the raid it revealed that Shri Mahesh Bharadwaj, proprietor of the appellants had taken portion consisting of three rooms of a house on rent from Shri Bhanwarlal at Village Marta and work of stitching of HDPE bags with the aid of power was being done by Jitendra Jain, in that very premises on his direction. The records of all the four abovesaid dummy units, were also seized and it was found that the entire manufacturing activity in the name of these dummy units was being done in the factory premises of the appellants and the entire production of the HDPE bags was being supplied to M/s. Udiapur Phosphates and Fertilizers wherein Mahesh Bharadwaj, proprietor of the appellants was one of the active Directors. The clearances of the HDPE bags were being shown on papers in the name of the dummy units although the manufacturing and the supply of bags was being made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llector, however, did not agree with their contention and confirmed the duty demand as indicated in the show cause notice on them and also imposed penalty under Rules 173Q(1) and 226 of the Rules on them through the impugned order. 5.Feeling dissatisfied with this order of the Additional Collector, the appellants have come up in appeal before this Tribunal. 6.The learned counsel for the appellants has assailed the validity of the impugned order on the ground that there was no ground to prove that all the four units were dummy and there was any flow back of the money from these units to the appellants. Therefore, the clearances made by the so called dummy units could not be added to the value of the clearances made by the appellants during the years 1988-89 and 1989-90 of the goods in question (HDPE bags). 7.On the other hand, the learned SDR while refuting the contention of the counsel has reiterated the correctness of the impugned order of the Additional Collector of Central Excise and maintained that there was ample evidence on record to prove that all the four units in dispute were dummy units created by the appellants with a view to evade payment of the excise duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rges were also being paid by Mahesh Bharadwaj and the work of stitching of the bags was being got done from Jitendra Jain, by Mahesh Bharadwaj. 9.Similarly, Jitendra Jain in his statement dated 4-9-1990, also admitted of having been assigned the work of stitching of HDPE bags on the machines installed in one of the rented rooms owned by Bhanwarlal, by Mahesh Bharadwaj. He further admitted that the raw material for the manufacture of those bags was being supplied to him by Mahesh Bharadwaj, proprietor of the appellants. He even went to the extent of conceding in his statement that the job charges were being paid to him by Shri Mahesh Bharadwaj for the stitching of the bags. The correctness of his statement was admitted by Mahesh Bharadwaj himself also wherein he fairly conceded that he was getting the HDPE bags stitching on contract basis from Jitendra Jain at Village Merta and that the stitching machine was installed by him in the premises of Bhanwarlal from whom he had taken it on rent. 10.The Accounts Assistant of the appellants in his statement recorded on 3-9-1990 also admitted that he was working not only for the appellants but also for other above named four dummy units a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availing the benefit of Notification No. 175/86-C.E. If all clearances had been made by him in the name of his principal unit (appellants) during the years in question, he would not have been able to claim concessional/nil rate of duty under Notification No. 175/86 for having crossed the prescribed limit. In order to avoid all this, the above named four dummy units were created by him and to give these units on papers independent names and existence he got them registered with the Sales Tax, Income-tax and Central Excise authorities. There is nothing on the record to suggest that these units ever independently filed sales tax/income-tax returns in respect of the sales made by them and income accrued thereon during the years in question, of the HDPE bags. They did not own any machinery for producing those bags and no record has also been produced to show that these units hired labour or purchased any raw material from the market, for that purpose. 13.The argument of the learned counsel that there was no evidence on the record to show any flow back of money from any of disputed these dummy units to the appellants unit as such these could not be taken to be dummy units, is wholly mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d run only by Mahesh Bharadwaj, the proprietor of the appellants. 15.Similarly, the ratio of the law laid down in (1) United Copiex (I) Ltd. v. Union of India, 1990 (47) E.L.T. 297 (Del.), (2) CCE, Jaipur v. Rock Drill (I) Pvt. Ltd., 1997 (95) E.L.T. 93 (Tribunal), (3) Binod Kumar Maheswari v. CCE, Calcutta-I, 1997 (90) E.L.T. 83 (Tribunal) and (4) CCE, Goa v. Pramilla Sanitary Products P. Ltd., 1997 (96) E.L.T. 565 (Tribunal) and (5) Shree Packaging Corporation, Hyderabad v. CCE, Hyderabad, 1987 (32) E.L.T. 94 (Tribunal) referred by the counsel is not attracted to the facts of the case in hand. In the first case, it has been only observed by the Hon'ble Delhi High Court that where seller and buyer were not related persons clearances of both could not be clubbed together to deny the benefit of Notification No. 65/81-C.E. dated 25-3-1981. In the second case, the clubbing of clearances of the two units was not allowed by the Tribunal on the ground that there was no evidence to show free financial interflow between the two units and the total administrative control of one unit by the other. In the third case, the clubbing of the two units was not permitted by the Tribunal as both th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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