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2018 (7) TMI 1277 - AT - Central ExciseSSI Exemption - Dummy units - N/N. 9/200-CE dated 01.03.2000 - it was alleged that the appellants were holding the other firm, M/s Mascot Chemicals, as a dummy unit - demand was confirmed jointly and severally against M/s Chemicos (the appellants) and M/s Mascot Chemicals. Held that:- The Small Scale exemption is available to a unit engaged in the manufacture of excisable products. As long as the two units are independent units, complete in themselves to manufacture the goods and did not belong to the same manufacturer, both are separately entitled to the benefit of small scale exemption notification - Admittedly, in the present case one unit is proprietary unit of Shri Avdhesh Gopal Agarwal and the other unit is a partnership unit of Shri Avdhesh Gopal Agarwal and his wife Mrs. Niti Agarwal. Admittedly both the units are located at far off places and are fully equipped to manufacture goods being manufactured by them. The clubbing of clearances of two units is required to be done when one unit is a dummy of the other unit and the goods being manufactured in one unit are being cleared in the name of other unit. When the two units are independent of each other and are manufacturing their own goods and doing the business independently as a separate legal entity, the clubbing of clearances cannot be done for the purpose of denial of the small scale exemption notification. Smt Niti Agarwal is a partner in M/s Mascot chemicals whose clearances stand clubbed with the clearances of M/s Chemicos. It is on record that no notice was sent to M/s Niti Agarwal calling upon her to show cause as to why the clearances of M/s Mascot Chemicals to which she is a partner should not be clubbed with the appellants Clearances. No statement of Smt Niti Agarwal was recorded and as such it is not justifiable on the part of the Adjudicating Authority to hold her partnership concern as a dummy of M/s Chemico, without even intimating the said facts to Mrs Niti Agarwal - one out of the two units is a proprietary unit and the other is a partnership unit. The clearances of the two units in question cannot be clubbed as held by the Tribunal in number of decisions - Reference made to the decision in the case of Mayur Printers V/s Commissioner of Central Excise, Mumbai-I [2017 (3) TMI 598 - CESTAT MUMBAI]. Also, It is not the Revenue’s case that the units were not separately registered with the various Tax departments and were not doing the business independently in the factories located too far away from each other. The mere fact of Shri Avdhesh Gopal Agarwal being proprietor of one unit and partner of other unit by itself is not sufficient to hold the clearances from both, to be clubbed and to deny the benefit of small scale exemption notification. Appeal allowed - decided in favor of appellant.
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