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2013 (11) TMI 1019 - AT - Central ExciseClubbing of clearances for the purpose of SSI Exemption - Company controlled by family members - Dummy units - Assessee contended that each of the units is an independent entity and there is no justification for treating them as the units owned by one person – Held that:- The question of identifying the main unit and the dummy unit and demanding duty only from the main unit arises only in that situation when on investigation, only one unit is found to be actually functioning and other units are found to be just non-functional fake units established just to show bogus production and clearances in their name – Following Income Tax Commissioner, Madras Vs. Meenakshi Mills, Madurai [1966 (9) TMI 34 - SUPREME Court] and CCE Vs. Modi Alkalies & Chemicals Ltd. [2004 (8) TMI 108 - SUPREME COURT OF INDIA] - when on lifting the corporate veil it is found that only one person/company has extraordinary interest and pervasive control over the financial matters and management of other companies, their clearances have to be clubbed for determining their eligibility for the SSI Exemption Notification No. 1/93-CE. the evidence on record is sufficient to establish that it is BSL, Delhi controlled by Sh. H.R. Shiv and his family members, which had pervasive financial and management control over ESIL, LHIL, NIPL, SGBL & FSIL and only to wrongly avail the SSI Exemption, the manufacturing activities had been split up into several companies. Therefore, ESIL, LHIL, NIPL, SGBL & FSIL have to be treated as the units owned by BSL, Delhi and for determining their eligibility for SSI Exemption, their clearances during the preceding financial year have to be clubbed and if this is done, none of them would be eligible for SSI Exemption. - The duty demands have, therefore, been correctly confirmed and penalty under section 11AC has been correctly imposed on each of the six Appellant companies Imposition of Penalty u/s 11AC - Imposition of Penalty under Rule 209A of Central Excise Rules 1944/ Rule 26 of Central Excise Rules, 2001 – Held that:- Sh. H.R.Shiv, his son Sh. Neeraj Hans have dealt with the goods which they knew or had reason to believe, were liable for confiscation, penalty on then under Rule 209A of Central Excise Rules, 1944/Rule 26 of the Central Excise Rules, 2001, has been correctly imposed – Decided against Assessee.
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