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2018 (10) TMI 1059 - AT - Central ExciseSSI Exemption - clubbing of clearances - related person - close relationship between the Directors and Partners in the four companies - Inter Connected Undertakings - N/N. 8/2003-CE dated 1.03.2003 - issuance of four distinct SCNs individually to four units. Held that:- Undisputedly in the present case revenue has proceeded to issued four distinct show cause notices individually to each of the unit. In the impugned order Commissioner has also confirmed the demand against each of the unit individually - This fact of issuance of four distinct show cause notice and confirmation of the demand against unit separately is recognition of the fact that each of the unit exists as an independent unit. It is not understood how four separate demands can be made when the entire case is for clubbing the clearance of the four different entities/ units by treating the entire scheme from creation of the units as façade for evading the central excise duty. In case the four units/ entities are treated as separate units/ entities for proceeding each of them separately the entire basis for proceedings get vitiated. The entire case of revenue in the show cause notice and the impugned order is based on the fact to show that all the four units are interconnected units and hence related to each other in terms of Section 4(3)(b) of the Central Excise Act, 1944. And since they are related there clearances has been sought to be clubbed. The approach of the revenue in the entire matter reflects the poor appreciation of law. The concept of related person as have been incorporated in the Section 4 and Valuation Rules, is for the purpose of determination of the correct assessable value in cases where the goods are being cleared though the related person. The admittance of relationship between the two units for the purpose of said section goes to signify the existence of two separate entities which may have some relationship impacting the transaction value between the two. It is now settled by various judicial pronouncements that to club the clearances of the two separate entities one should be shown to be the dummy of the other. Since department has failed two discharge the said burden the clubbing of the clearances as proposed by the revenue in the present case cannot be upheld. Since there are no merits in the grounds for raising the demand against each of the unit separately, the order of Commissioner is set aside on this ground itself without going into any other arguments advanced by the appellants in appeal or during the course of hearing - appeal allowed - decided in favor of appellant.
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