TMI Blog2014 (2) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... s cleared to Suzuki Processors. Admittedly revocation of registration was done in 2012 and show cause notice was also issued two years before to the impugned period expired. Prima facie, it appears that the matter in controversy warrant extensive examination from various angles testing evidence rigorously. When PGO Processors is stated to have paid duty on the goods cleared valuation issue depends on several factors including the terms of the aforesaid notifications to be tested by an elaborate hearing. Prima facie , appreciating whim and caprice are alien to justice, and noticing that balance of convenience tilts in favour of the assessee, dispensation of pre-deposit till disposal of appeal would serve interest of justice - Stay granted. - Appeal Nos.2163 to 2170, 2250-2251 & 2263 of 2012 - Interim Order Nos. 229-239/2013-EX(DB), dated 15-10-2013 and Stay Order Nos. 59786-59796/2013-EX(DB) - Dated:- 15-10-2013 - Ms. Archana Wadhwa and Mr. Sahab Singh, JJ. For the Appellant : Shri V Laxmikumaran, Adv. For the Respondent: Shri I Baig, DR JUDGEMENT Per: Archana Wadhwa: All the stay petitions are being disposed of by a common order as the issue involved is ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t existence, though they are admittedly discharging their duty burden on the correct assessable value but keeping in view that they are a part and parcel of M/s Suzuki Textile, who are selling their goods in the market, the duty should have been discharged at the sale price of M/s Suzuki Textile. 4. All the above grounds raised by the revenue for confirmation of demand and imposition of penalties stand rebutted by the ld. Advocate for the appellant. He submits that M/s PGO Processors is a company duly incorporated under the Companies Act and as such is a distinct legal entity. The agreement entered into between M/s PGO Processors and M/s Suzuki Textiles is in terms of commercial arrangement and admittedly it is M/s PGO Processors who is processing the goods and is the actual processor. They have their own separate plant and machinery and separate finances. They cannot be held to be extension of M/s Suzuki Textiles. Our attention also drawn to the fact that M/s PGO Processors has been given a separate registration by the department itself. In fact, the same dispute was raised by the Revenue earlier in December, 1998 when the provision of Section 3A of the Central Excise Act was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record as also on the basis of the declaration of law in the case of Rajasthan Spg. Wvg. Mills Ltd., we are of the view that the appellant are able to make out a good prima facie case in their favour. Accordingly we allow the stay application. Archana Wadhwa : I have gone through the order recorded by learned sister but I have a different view in the matter and therefore, I am recording separate order. 2. The brief facts of the case have been fairly narrated in the proposed order recorded by Hon'ble Member (Judicial). Therefore, I do not find it necessary to repeat the same. 3. According to Revenue, M/s PGO Processors Pvt Ltd is a facade and is an extended unit of M/s Suzuki Textiles. It is the contention of the Revenue that duty is required to be paid on the processed fabrics at the price at which M/s Suzuki Textiles sells the goods in the market. On the other hand, applicant's contention is that M/s PGO Processors and M/s Suzuki Textiles are independent units. Demand has been confirmed by the Commissioner taking the sale price of M/s Suzuki Textiles as assessable value. 4. I find that M/s Suzuki Textiles Ltd entered into two separate agreements with a private li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s PGO Processors without permission from M/s Coal India Ltd/Director Industries. 6. It is also found that M/s PGO Processors did not introduce working capital of their own for operating of the process house. Process house was being funded by M/s Suzuki Textiles on day to day basis. It is also found that manpower of 100 employees and also 300 workers who were earlier working for M/s Suzuki Textiles were working with M/s PGO Processors without any change in the service conditions. There was no fresh letter issued by M/s PGO Processors and no steps were taken to cancel the initial letters issued by M/s Suzuki Textiles. M/s R.S. Toshniwal who was earlier working as General Manager, M/s Suzuki Textiles was made General Manager of M/s PGO Processors, Shri D.L. Ladha, General Manager of Weaving Division of M/s Suzuki Textiles in the same premises continued to provide the control of the financial matters connected with the process house. He entered into negotiation for the supply of raw material connected with M/s PGO Processors. 7. Shri P.C. Jain, Director of M/s PGO Processors in his statement dated 5.3.1998 stated that an amount of Rs.157.30 lakhs pm was required for running the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, J. Difference of Opinion Whether pre-deposit is required to be waived as held by Hon'ble Member (Judicial) Or Pre-deposit of Rs.5 Crores is required to be made by the applicant as held by Hon'ble Member (Technical) Per: D N Panda: 11. At the interim stage both members had difference in their opinion on the issue of pre-deposit on the facts and circumstances of the case. Accordingly, following question was referred for answering: "Whether pre-deposit is required to be waived as held by Hon'ble Member (Judicial)? OR Whether Pre-deposit of Rs. 5 crores is required to be made by the applicant as held by Hon'ble Member (Technical)?" 12. The main question involved in the appeal is whether Suzuki Processors was the real manufacturer of the output manufactured by PGO processor. Learned Judicial Member records that both Suzuki Processors and PGO Processors are different from each other by virtue of registration granted separately although registration of PGO Processors was revoked on 30.3.2012 and clearances of the goods by the later was allowed in terms of order of the Hon'ble High Court of Rajasthan in writ petition No.11/99 disposed on 22.4.1999. Indepe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sors Pvt. Ltd. 16. On the other hand Revenue contends that learned Technical Member has recorded the material facts of dubious practice of not obtaining permission from IDBI to lease out the fixed assets and also no permission obtained from South Eastern Coal Fields to supply coal to PGO Processors Pvt. Ltd. by the appellant. Manpower of Suzuki Processors was used by PGO Processor for manufacture of goods. Financial assistance was given by Suzuki Processors to PGO Processors. There cannot be claim of two different entity. It was further submitted by Revenue that learned Technical Member has rightly examined the issue of denial of notification benefit aforesaid since PGO Processor has no independent existence. 17. Heard both sides and also looked into the background of the case. 18. While both the members have recorded factual aspects, none has recorded the consideration on which interim order should base. While prima facie case is one of the consideration, irreparable injury that may be caused by an interim order is a vital consideration. So also balance of convenience cannot be brushed aside to consider interim prayer. No doubt, pre-deposit is rule and waiver thereof is an e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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