9911796707
TMI Blog2009 (5) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... . Wearwell Tyres & Tubes P. Ltd. They were also registered as units for manufacture of tyres and they were availing exemption under Notification No. 231/85 and paid the duty at 50% of rate of duty otherwise leviable on such goods in terms of said Notification. Shri Sam Verma is Director of M/s. Wearwell Tyres & Tubes P. Ltd. and Shri K.K. Mehto is Managing Director of M/s. Wearwell Tyres & Tubes P. Ltd. who are the other respondents. 3. Heard both sides. 4. Relevant facts in brief are as follows: (a) The respondent No. 1 started manufacturing tyres with an installed annual capacity of 6,00,000 tyres in 1983 and entire activities were managed by Shri Sam Verma. The other three units (respondents No. 2, 3 & 4) started manufacturing from December, 1986, June, 1987 and November, 1987 respectively. They were started for the purpose of manufacture of bus and truck tyres each with a capacity of 10,000 tyres per annum. Each of the respondent No. 2, 3 and 4 availed small scale exemption in terms of Notification 231/85, dated 11-11-85 claiming that the aggregate value of tyres and tubes and flabs cleared for home consumption on behalf of each of them was below Rs. 2 crores and accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nored by the Commissioner. He took us through some of the documents which, according to him, the Commissioner has omitted to consider in proper perspective. For example, the internal communication dated 28-3-88 refers to plan for showing dispatch of 66 number of tyres before 31-3-88 even though they were not physically manufactured. This documents show that the respondents have indulged in manipulation of records. He also relied on a letter dated 1-12-88 written by one Shri A.K. Roy, Chief Coordinating Manager of Wearwell Tyre and Tube Industries (P) Ltd. to the Branch Manger, Central Bank of India, Bhopal wherein certain accommodation was asked for in relation to sale of green tyres by respondent No. 1 to respondents No. 2, 3 and 4 and sale of tyres back by respondents No. 2, 3 and 4 to respondent No. 1. He submitted that the Commissioner has failed to appreciate the facts that the entire activities starting from procurement of raw materials and the decisions relating the quantum of production and the quantum of clearance by small scale units were controlled by officials of respondent No. '1'; that the three small units did not have sufficient manufacturing facility to independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve units and the said list is supported by an inspection report of the inspection done by Manager DIC Betal at the time of granting them the provisional SSI registration. Affidavits and copies of invoices for the purchase of machines have also been submitted by them from which it is apparent that these were not purchased by Shri Sam Verma as alleged in the notice but were purchased by different persons. They had also supplied list of machineries to the Superintendent (P), Central Excise Indore on 3-2-1989 during his visit to the smaller units. Balance sheets of the respective units also show the value of plant and machinery installed, in those units. 13.2 The smaller units have also submitted copies of invoices of steam and other utilities supplied by M/s. WWTL and copy of few pages of ledger showing accounting of the above transactions which confirm that all the transactions between the smaller units and M/s. WWTL were on principal to principal basis. 13.3 They have also submitted copy of panchnama dated 29-1-1987 in respect of M/s. VT wherein it has been clearly mentioned that a green tyre was got manufactured by the Central Excise Officers in presence of panchas in the said sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p these expanses there was a difference of about 11% in the ex-factory price of the smaller units and sale price of M/s. WWTL. As such, the prices cannot be considered as favourable prices. Simple by asking the smaller units that their sale price should not be greater than the ex-factory net price of tyres manufactured by M/s. WWTL plus applicable taxes, it cannot be inferred that M/s. WWTL were controlling the prices of smaller units. It is a normal trade practice that when a unit is marketing the products manufactured by another unit and which are similar to the goods manufactured by themselves, they will purchase the goods from other unit at a lesser value than their own, otherwise they will suffer a loss because they will also be incurring marketing expenses. 15. There is no evidence available in the documents brought on record to reveal that there was an overall control of M/s. WWTL and Shri Sam Verma over smaller units as alleged and it is not proved that all the four units were being controlled by same officers deployed at work site. M/s. WWTL has been promoted by M/s. Akron Tyre Company of Grand Cayman, USA and it hold 98.2% of total shares of WWTL. Shri Sam Verma is Presi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f SSI exemption goes on to prove that the Department had accepted both the companies as independent/separate identities and units and as such the Department is now barred from taking somersault and to plead that only one company is the main unit and the other is a dummy one. In the present case also all the four units are duly registered separately with State and Central Government departments for purposes of various laws. M/s. DT M/s. VT and M/s. SKT were earlier issued show cause notices for denial of Modvat credit on bead, tread and rubberised textile material on the ground that they had received green tyres from M/s. WWTL in the guise of bead, tread and rubberised sheets. The demands were also confirmed by the Department but the Tribunal in the case has allowed the credit to all the units vide its Order No. A/473-78/99-NB(DB) in the case of Electro Mechanical Engg. Corpn. v. Commissioner, CE, Jaipur - 2003 (152) E.L.T. 194 (T), the Tribunal has observed that confirmation of duty against all the three firms itself is enough to belie the allegations of the Department that the firms no. 2 and 3 were dummy of firm no. 1. 8. From the above, it is seen that the Commissioner has held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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