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2017 (12) TMI 222 - AT - Central ExciseSSI Exemption - N/N. 9/2001-CE dated 1.3.2001 as amended - corrugated boxes - allegation of the department is that the clearances made by M/s. Packers India for the period till it was taken over by the appellant-company as well as the clearances of M/s. AGK Packers, another partnership firm is to be clubbed with the clearances of the appellant-company and to be treated as one unit so as to deny SSI exemption as the turnover after clubbing exceeded the prescribed limits - Held that: - On scrutiny of records of M/s. AGK Packers and the appellants, it was revealed that the partners of M/s. AGK Packers ShriT. Kumararaj and Shri T. Asokan were also directors of the appellant company - the appellant company was incorporated in the year 1989 and has later taken over the assets and liabilities of M/s. Packers India with effect from 1.10.2003. After such takeover of the assets and liabilities, M/s. Packers India, in our view, does not have any individual existence. So the contention of the department that the clearances made by M/s. Packers India upto 1.10.2003 has to be clubbed with that of the appellant company does not make legal sense. As already mentioned, the corrugated boxes became leviable to central excise duty only with effect from 1.3.2001. Clubbing of clearances of clearances of M/s. AGK Packers - dummy units - Held that: - When M/s. Packers India was taken over by the appellant company, which is a company registered under the Companies Act, the said unit could no longer be considered as a separate unit so as to club the clearances of the unit alleging it to be a dummy unit of the appellant company - Merely because Shri T. Kumararaj and Shri T. Asokan are active partners in M/s. AGK Packers and also the appellant company, it cannot be said that M/s. AGK Packers is a dummy unit of the appellant-company. Validity of SCN - separate notice has not been issued to M/s. AGK Packers and M/s. Packers India, though the department alleges that these are dummy units - Held that: - The Tribunal in various cases has taken a consistent view that the dummy unit has also to be put into notice for clubbing the clearances with another unit especially when the element of their independent existence is denied - non issuance of SCN to the alleged dummy unit would vitiate the proceedings. CBEC Circular No. 6/92 dated 29.5.1992 clarifies that the clearances of a partnership firm cannot be clubbed with that of a company even though they may be having common partners / directors - In the present case, the department has been carried away by the fact that Shri T. Kumararaj and Shri T. Asokan who are partners in M/s. AGK Packers is also the Directors in the appellant-company. This alone cannot be a ground for clubbing the clearances. Appeal dismissed - decided against Revenue.
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