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2020 (1) TMI 374 - AT - Central ExciseSSI Exemption - clubbing of clearances - dummy unit - mutuality of interest - sole reason for clubbing the clearances of JPPL with PPI only that there were some financial transactions and there are controlled by family member and there are some records were found in each other factory premises - HELD THAT:- During the course of visit, the machinery for manufacture of finished goods was found installed in the premises of JPPL. Moreover, some stocks on finished goods were also lying there and it is not denied by the Revenue that these two units are not separate units. In fact, both the units are located at a distance of 5 KM. from each other and having any manufacturing infrastructure separately installed in their premises. Merely, both the units are owned by the family members cannot be the reason for clubbing the clearances. Moreover, it was not alleged in the show cause notice that JPPL is a dummy unit. Further, the directors of both the units are not common and initially PPI was a proprietorship concern and JPPL is a private limited company. The private limited company is distinct from an individual, therefore, it cannot be said both are same units. In the absence of any corroborative evidence on record, the clearances cannot be clubbed. The other ground for clubbing the clearances is that there are some financial transactions between each unit - HELD THAT:- The individuals have given money on loan to the units and if other unit is required money, the same is returned by the other unit to the individual who further give the loan to that unit and on all the transactions interest has been paid. In these circumstances, it cannot be said that there was flow of funds between the both units and these types of transactions cannot be the reason for clubbing the clearances - Moreover, another allegation is that both units are managed by the family members or one person, the same cannot be the reason to club the clearances. The clearances of both the units cannot be clubbed together and M/s JPPL is entitled for benefit of SSI exemption N/N. 08/2003-CE dated 01.03.2003 - Appeal allowed - decided in favor of appellant.
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