TMI Blog1996 (3) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... of Ambica, Shri Rajubhai Manharlal Thakore was recorded, who revealed that this factory is manufacturing weigh bridges since 20 years and their factory is run by a partnership consisting of S/Shri Maganlal Himatlal Thakore, Manharlal Maganlal Thakore and Narendrakumar Maganlal Thakore and that they keep their records in the office at another place. He revealed that in their factory, drill machine, shaping machine, small drill machine, portable drill machine and emery machine are installed and they carry out welding work through contract. On visit to Jay Ambica Scale Mfg. Works (hereinafter referred to as Jayambica), which is situated nearer to Ambica, they found that it is run by a proprietary concern in the name of Shri Sumanchandra Maganlal Thakore (elder son of Shri Maganlal Himatlal Thakore). Shri Rajubhai Manharlal Thakore, looking after the factory of Jayambica stated that this factory is manufacturing weigh bridges since last four years. The machinery installed in Jayambica are small lathe, Hexso Machine and emery machine. No weigh bridges manufactured were found in manufactured condition. Some wooden frames were found, which were claimed to be given to another factory for m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as reflected in the statement of Balkrishna Ratilal Thakore, worker of Ambica he points out that Sumanchandra (Proprietor of Jay Ambica) is looking after the work in Ambica between 9 AM to 12 Noon and between 16 hours to 18.00 hrs and Shri Narendrabhai Maganbhai also comes to look after the work. He also reveals that the following machines are installed in Ambica. NAME OF THE MACHINERIES PURPOSE 1. Big Drill Machine To make holes on the articles of one inch. 2. Small Drill Machine For making holes of 1/2 inch 3. Shaping Machine For Shaping 4. Hexo Machine To cut articles. 5. Emery Machine To cut articles 6. Hand drill For making hole 7. Compressor For colouring He also reveals that there is no lathe in the factory of Ambica. They take the materials for lathe work, cutting and making holes only to the factory of Jai Ambica. After completing the required lathe work, they bring back the goods to their factory, Jayambica also use the machinery of Ambica for their work. This position is reiterated by 4 more workers of Ambica. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prietors in either of the two units. 4.2 It is a settled law that merely because they use office premises and telephone is common, they cannot be held to be one and the value of clearances cannot be clubbed together on this ground. Moreover, it is not correct to say that no rent or phone bill is paid. This allegation is not factually correct. 4.3 Merely because certain parts of weigh bridge of Ambica are sent to Jai Ambica for fabrication and vice versa and labour charges are not recovered, they cannot be held as dummy units. In both the units certain machines were noticed and that fact is not disputed even in the Show Cause Notice. Hence, being factories set up by members of the same family, they have been helping each other in the production line. 4.4 Referring to cross-examination of Shri Shreemali Supdt. of Central Excise, who investigated into the case, he points out that even the investigating officer has categorically confirmed the following aspects. (i) Purchase of raw materials was independent and separate. (ii) No exchange of raw materials took place between the two units. (iii) Both units have registration separately with weights and measures department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropping the Show Cause Notice. Hence we deem it proper to look into this in greater detail. 5.4 The investigating officer has confirmed the following facts during cross-examination. (i) Purchase of raw materials for production was independently done by each unit. (ii) No exchange of raw materials took place between the two units free of cost. (iii) It is not verified by him whether any pecuniary interest had been flowing from one unit to another, out of the sales of each unit. (iv) No control is exercised by any unit over the other s purchase of raw materials or sale of finished goods. (v) Neither Ambica is distributing the scales manufactured by Jai Ambica nor Jai Ambica is the distributor for Ambica s products. (vi) Weigh bridges manufactured by both the units are sold under respective brand names. 5.5 From the above position revealed by the investigating officer, it would appear that there is no financial flow back of funds realised on sale of finished goods. No evidence has been brought out in this regard. There is a tacit admission by the investigating officer that these aspects have not been looked into. 5.6 As seen from the production angle projected by Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back. Similarly worded notification is found in the present appeals also. 5.9 In the light of the above discussions, the factors pleaded by Shri Mondal may raise a cloud of suspicion but do not clinch the issue in their favour, especially when there is no evidence brought out in the Show Cause Notice to the effect that sale of finished goods is effected in common and sales proceeds are taken by one unit in respect of clearances effected in the name of another or that the other unit is dummy or that there is no production of weigh bridges in the other unit Jai Ambica. Benefit of doubt has to be given in these circumstances. 6. Moreover, the Supreme Court in the case of Narne Tulaman reported in 1988 (38) E.L.T. 566 (SC) held that even assembling the components to bring about weigh bridges would amount to manufacture. In this case, the item, involved is weighing scale akin to weighing bridges. When there is no evidence indicated in the Show Cause Notice to bring out that the assembly of weighing scale is done only in Ambica and they controlled the clearance of all weighing scales, clubbing the value of clearance of both the units does not seem to be justified. The facts alleged e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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