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TMI Blog2013 (4) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors and his son Shri Dinesh Jangir as Managing Director. This unit is also manufacturing the same items as DSD and is availing SSI exemption under Notification No. 8/03-CE. 1.3 On receipt of intelligence that both the units are actually controlled and managed by Shri D.S. Sharma and they have been created as separate units only on paper for evading excise duty and that they are wrongly availing the SSI exemption to which they would not be entitled on the basis of their actual clearances, the premises of both the units and the residential premises of Shri D.S. Sharma were searched on 22/3/10 in course of which certain records were recovered which were taken over by the officers. 1.4 In course of investigation, statements under Section 14 of the Central Excise Act, 1944 were recorded of - (a) Shri Joginder Singh Jangir, Foreman DSW on 22/3/10; (b) Shri Satish Pilania, Manager, DSW on 22/3/10; (c) Shri Umesh Yadav, Manager, DSD on 22/3/10 and (d) Shri P.B. Sathyaseelan, Foreman, DSD on 22/3/10. Their statements indicated that - (a) both the units were being run by Shri D.S. Sharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, 2002 on Shri D.S. Sharma and Shri Dinesh Jangir. 1.9 The above show cause notice was adjudicated by the Commissioner, Central Excise, Delhi IV vide order-in-original No. 22/DM/Adjn./2011-12 dated 17/10/11 by which - (a) the duty demand of Rs. 3,30,81,801/- was confirmed against DSD alongwith interest under Section 11AB by clubbing the clearance of DSD with DSW during each year during 2005-2006 to 2009-2010 period and denying the benefit of SSI exemption; (b) penalty of Rs. 3,30,81,801/- was imposed on DSD under Section 11AC; and (c) penalty of Rs. 70,00,000/- each was imposed on Shri D.S. Sharma and Shri Dinesh 3angir under Rule 26 (1) of the Central Excise Rules, 2002. 1.10 Against the above order, these appeals alongwith stay applications have been filed. 2. Heard both the sides in respect of stay applications. 3. Shri Suresh Aggarwal and Shri Vivek Aggarwal, Advocates, the learned Counsels for the appellants, pleaded that DSD and DSW are two separate and independent private limited companies, that just because of some common directors they cannot be treated as one and the same, that in term of board's instructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its are being controlled by Shri D.S. Sharma and are being run as one unit, that the goods manufactured in the premises of DSW were being cleared under the invoices of DSD, that there was no facility for polishing in DSW and the same in respect of the goods manufactured in the factory of DSW was being either done in the premises of DSD or in the customer's premises, that there was common ledger of the two so called independent companies and the payment for the bills issued to one company was being made by the other, that the evidence on record indicates that the goods ordered by DSW were being delivered to DSD, that quality control was centralised at DSD, that all this evidence indicates that DSW was only a colourable device for tax evasion by splitting the manufacturing turnover of DSD into two units, that no justification for cross examination of the witnesses had been given, that in the name of both the units - DSD and DSW a large number of sales of "timber" are shown, which on sample verification were found to be sales of door, chowkhats, etc. that the sales claimed to be "fake sales" included in the revised balance sheets of DSD and DSW for 2005-2006 and 2006-2007 are real sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Satish Pilania, Manager, DSW stating that the bills/invoice in respect of the finished goods cleared from DSW are issued from the factory premises of DSD, either from the bill book of DSW or from the bill book of DSD. (3) Statement dated 22/3/10 of Shri Umesh Yadav, Manager DSD wherein he stated that he does not know as to whether a particular item will be billed from DSD or DSW. (4) Statement dated 22/3/10 of Shri P.B. Sathyaseelan, Foreman, DSD wherein he stated that he gets his salary from DSW and that he does not know as to whether a particular item cleared from DSD will be billed from DSD or DSW. (5) Appraisal report of Income Tax Department in respect of DSD and DSW for 2005-2006 and 2006-2007 according to which the sales turnover of DSD and DSW during these years had been grossly under reported. The sale of timber, on inquiry with the buyers we found to be the sale of doors, chowkhats, furniture etc. (6) Statement dated 23/4/10 of Shri D.P. Singh, GM, DSD wherein he stated that though on paper he is employee of DSD, he is handling the work of DSW also, and that he was maintaining the hand wri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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