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2015 (5) TMI 99 - AT - Central ExciseSSI Exemption - Clubbing of clearances - Clandestine removal of goods - Held that:- Allegation against the appellant is that both the companies were promoted by Shri D.V. Khanna himself as Managing Director of both the companies and Director in both the companies are same. It is also found that by the Adjudicating Authority, the salesman/dealers to be decided mutually and marketing of both the companies were commonly and salary of employee of M/s. Nova was paid from M/s. DSA and commission of employees of M/s. NOVA was paid from M/s. DSA s account. The annual incentives were given to the dealers on the basis of combined sales of both the units. Moreover, the shareholding in both the units by the Directors is almost common. Sometimes, money was given to each other but nothing was shown in the balance sheet. Therefore, clearance of both the units are to be clubbed as the same are managed by Shri D.V. Khanna, Managing Director in the clearance of NOVA. - both the units are separately located having separate registrations and dealing separately. We also find that there is no financial flow back, therefore, there is no mutuality of interest between the units. Accordingly, clearances of both the units cannot be clubbed together. Case has been made out against the appellant on the basis of the documents resumed from the residence of employees and third party. There were no incriminating documents recovered from the custody of the appellant or Managing Director thereof. On the basis of the investigation conducted, the matter was referred to the Income-tax department also and the Income-tax Department after further investigating the case found that the some parties are manufacturing the duplicate goods and some employees of the appellant were in league with the parties who are manufacturing duplicate goods. On the basis of that investigation, the case booked by the Income-tax Department has been dropped. Cross-examination of Shri Suresh Anand was not granted from whose possession certain records were recovered which were relied upon by the Adjudicating Authority. Moreover, the production capacity of the appellant has not been considered. It has not been proved with supportive evidence that the appellant has used electricity/procured excess raw material, etc. In rebuttal, there is an evidence on record that some parties are manufacturing duplicate goods under the brand name of NOVA/ DSA are owned by the appellant. The case looked by the Income-tax Authority has been dropped for clandestine removal of goods, also supports the case of appellants. No efforts were made to comply with tests laid down by this Tribunal in the case of Arya Fibres (P) Ltd. (2013 (11) TMI 626 - CESTAT AHMEDABAD). Therefore, as discussed above and in view of the decision of Arya Fibres (P) Ltd. (2013 (11) TMI 626 - CESTAT AHMEDABAD), the charge of clandestine removal is not sustainable against the appellant. Accordingly, demands confirmed against the appellant on the account of clandestine removal, is not sustainable. Therefore, the same is set aside. - Decided in favour of assessee.
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