TMI Blog2001 (3) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... his wife Hammy Balsara. Aspi Balsara was managing director of Balsara Hygiene Products Ltd, and his wife its joint managing director. On 16th October, 1990 the partnership firm became a private limited company. In addition to the four members of the erstwhile partnership, two other persons became its shareholders. These were S.W. Deshpande and Hilla Mistry. Deshpande was director of the appellant firm and general manager of BHPL. Hilla Mistry was a director of Besta and Aspi Balsara's sister. 2. The department investigated the relationship between the appellant, and BHPL and Besta. The investment pattern in the earlier partnership firm and the company indicated to the officers that the losses were being divided equally between the partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 175/86 did not contain any provision stipulating any limit in investment in plant and machinery in a small-scale undertaking, although the regulations for certification of a unit as a small-scale unit may prescribe such a limit. Hence, the denial of the benefit on the ground that the plant and machinery exceeded Rs. 35 lakhs has to be struck down. As a matter of fact, the evidence submitted by the appellant shows that the value of investment has exceeded Rs. 35 lakhs. It is common ground that as on 1-4-1990 the value of such investment was Rs. 32,36,594/-. Addition to the extent of Rs. 2,79,140/- was made in that year, taking the total investment to Rs. 35,15,734, leading to the conclusion in the notice. However, there was reduction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured the goods - would have to be determined. In addition, the appellant's being a dummy of both these persons necessarily presupposes that they both acted in concert. There is absolutely no mention in the show cause notice or order relating to these aspects. 5. Apart from this, no clear reason is forthcoming in the Collector's order as to how the pattern of investment in the appellant leads to the conclusion that it is dummy. The Collector's reasoning for this conclusion from the investment and stock holding pattern are as follows : "The above definitely give the impression that the factory was created by BHPL and BCL only with an aim to create this factory and for providing plant and machinery and only for this purpose, BHPL and BCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits that the appellant made without risking a paisa of their money is, we agree, not without significance. (The argument of counsel that the appellant did not make a profit, but incurred loss, is facile. He cannot claim that they got into the venture in order to make a loss, or that they would not have received part of the profit if it had accrued.) 7. After analysing numerous decisions on this issue the Tribunal in its decision in J.N. Marshall Pvt. Ltd. v. CCE - 1997 (96) E.L.T. 149 it summed up the legal position as follows: "What we understand from the above decisions is that regard must be had to all the circumstances established in a given case but emphasis must be on common control of production and sales or on management con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92) E.L.T. 451 that by confirming the demand upon the so called dummies the adjudicating authority has implicitly recognised their existence would also have to be kept in mind. 11. The demand for duty will fall on limitation. As we have noted that the notice cited two factors - the failure to declare that the investment limit has been exceeded and the failure to indicate the true nature of the relationship between the parties. In his order the Collector has upheld the application of extended period only on the ground of failure to declare the investment in plant and machinery had exceeded Rs. 35 lakhs. There was no requirement for the appellant to declare the extent of investment limit to the department. The notification, as we have noted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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