TMI Blog2004 (3) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Central Excise Act as also against a penalty of Rs. 3 lakhs imposed on them under Rule 173Q of the Central Excise Rules, 1944. In the other two appeals, the challenge is against the personal penalties of Rs. 50,000/- each imposed on the aforenamed partners of the firm under Rule 209A of the said Central Excise Rules. 2.Briefly stated, the facts of the case are that the partnership firm viz. 'Jaybee Industries" has two units, one at Bhatinda (Punjab) and the other at Panchkula (Haryana), both manufacturing identical excisable goods specified under SSI exemption Notification No. 1/93-C.E., dated 28-2-93; that the Panchkula unit availed the benefit of exemption under the said Notification during the period July, 1994 to May, 1995; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturing units at Panchkula and Bhatinda were run by two different partnership firms and not by the same firm as held by the lower authorities; that Jaybee Industries, Panchkula and Jaybee Industries, Bhatinda were independent manufacturers dealing with each other on principal-to-principal basis and having separate registration under the Central Excise Act, State/Central Sales Tax Act and Income-tax Act; that they had separate SSI registration also; that they were maintaining separate bank accounts; that they were separately assessed to income-tax; that there was no mutuality of interest between them; that, for all these reasons, it was erroneous on the part of the original and first appellate authorities to have clubbed the clearances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat matter, liable to be held to have had mutuality of interest between them and, therefore, the clearances of the two units were liable to be clubbed for purposes of the SSI Notification. He also pointed out that the appellants had not even produced separate partnership deeds, if any, to prove their claim that the two units belonged to two different partnership firms distinct and separate for Central Excise purposes. In his bid to dislodge the Counsel's plea that the two units were distinct entities for Central Excise purposes, ld. SDR relied on the following decisions :- (i) H.T. Bhavnani Chemicals (P) Ltd. v. CCE [1997 (92) E.L.T. 502] (ii) CCE v. Elemec Inds. [2000 (120) E.L.T. 198] (iii) Rana Rubber Industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y "Jaybee Industries" consisting of Shri M.K. Aggarwal and Shri Pradeep Agarwala as partners holding equal shares. In the absence of contra evidence, this fact is enough for us to hold that the two manufacturing units at Panchkula and Bhatinda were run, during the material period, by a single partnership firm. That the two units were working separately for purposes of various statutes would not detract from the unrebutted fact that they were solely owned, managed and operated by the same partnership firm viz. Jaypee Industries. The legal position of a partnership firm vis-à-vis its partners was settled by the Supreme Court long ago vide Malabar Fisheries (supra). The Court examined the English, Scottish and Indian laws on partnership and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold good. For this very reason, we are also unable to rely on the decisions in Shakti Engg. Works (supra) and Loten Electricals (supra), which were rendered by following G.D. Industrial Engineers. In the case of Superior Products (supra), relied on by the Counsel, a partnership was treated as a juridical person. It appears, the Apex Court's ruling on the point had not been cited before the Bench. In Sethia Foods (supra), clubbing of clearances by two manufacturing units was disallowed by the Tribunal as it was found that the Revenue had failed to prove that the two units belonged to the same manufacturer. The instant case is factually different. The fact (alleged by the Department) that each of the two units (at Panchkula and Bhatinda) ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. Mutuality of interest between the two units was inbuilt in such a dispensation. The Tribunal's decision in D.M. Gears (supra), wherein it was held that mutuality of interest between two manufacturing units belonging to two companies required to be established for the purpose of clubbing of clearances under SSI Notification, cannot be applicable to such a situation. 7.We, therefore, hold that the Panchkula and Bhatinda units were only two factories run by the same partnership firm and the clearances from both the units were liable to be clubbed in terms of Paragraph (3) of Notification No. 1/93-C.E., which reads : "Nothing contained in this Notification shall apply, if the aggregate value of clearance of all excisable goods for home ..... X X X X Extracts X X X X X X X X Extracts X X X X
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