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TMI Blog2014 (2) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... uty liability on the same in terms of the formula laid down by the Hon'ble Supreme Court in the case of M/s Ujjagar Prints. 3. As per the revenue, the creation of M/s PGO Processors Pvt. Ltd. is a facade and in fact the said unit is an extended limb of M/s Suzuki Textiles Limited, inasmuch as the entire finances and control of M/s PGO Processors Pvt. Ltd. is done by M/s Suzuki Textiles Limited. Accordingly, revenue was of the view that the duty is required to be paid on the processed fabrics at the price at which M/s Suzuki Textiles Limited sells the goods in the market. The Revenue in his impugned order has held that inasmuch as M/s PGO Processors was not having an independent finance and floated the said company with limited resource of Rs.3,000/- and the loans from the IDBI Bank was procured at the instance of M/s Suzuki Textiles, the said PGO Processors is not an independent unit. It stand further held in the impugned order that at the time of giving the factory on lease to M/s PGO Processors the entire raw material in the shape of chemical and gray fabrics was transferred to M/s PGO Processors without any sale invoices. Even the coal quota, procured by M/s Suzuki Textile is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur vide which they have observed that since the company has been given separate registration certificate for the purpose of curing, producing, manufacturing, carrying on wholesale Trade/Business/ Business as Broker or commission agent or for otherwise dealing in excisable goods for special industrial purpose, the same would shows that the petitioner's unit has been recognized as a manufacturer/processor of fabrics. Inasmuch as the petitioner is a company duly registered under the Companies Act, 1956 and is distinct and separate juristic person by virtue of Section 34 of the Companies Act, 1956. Hence, the registration certificate granted to the petitioner company will have to be taken as valid recognition of its status as distinct and separate manufacturer or processor irrespective of the activities of its members or shareholders, so long as it is not revoked or suspended under Sub Rule 11 of the Rule 174. 6. On being questioned, we are informed that the registration certificate granted to M/s PGO Processors stands revoked only on 30.03.2012. Admittedly, the period involved in the present matter is prior to the said date of revocation and during the relevant period the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o M/s PGO Processors. They had written a letter to IDBI Jaipur on May 2, 1997. M/s Suzuki Textiles did not wait for permission from IDBI and entered into an agreement on 3.6.1997 with M/s PGO Processors and w.e.f. 3.6.1997 processed house was rented in the name and style of M/s PGO Processors Pvt Ltd. IDBI vide their letter dated 8th July, 1997 rejected the request of M/s Suzuki Textiles. No permission was granted by IDBI for giving the process house to M/s PGO Processors. M/s Suzuki Textiles did not intimate the IDBI about the fact of entering into lease agreement of 3.6.97 with M/s PGO Processors. 5. M/s Suzuki Textiles provided the power and coal to M/s PGO Processors and under separate job contract dated 3.6.97 under which (since M/s PGO Processors did not have separate power connection and quota of diesel and coal) M/s Suzuki Textiles agreed to provide these facilities to M/s PGO Processors. M/s Suzuki Textiles had provided the entire coal requirement for furnace/boiler of the process house under the guise of job contract without proper permission from M/s South Eastern Coal Field Ltd, a subsidiary of M/s Coal India Ltd. M/s South Eastern Coal Field Ltd vide their letter date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to pay duty in respect of the processed fabrics on the basis of selling price of such products. Therefore, findings of the Commissioner that M/s PGO Processors is not an independent unit has considerable force. 8. While granting unconditional waiver, reliance has been placed on the decision of Hon'ble Rajasthan High Court Jodhpur dated 22.4.1999. In this case, I find that Hon'ble High Court has directed the Department to allow clearance of the goods by M/s PGO Processors on provisional basis on payment of duty as per sub-clause (ii) of clause 1 of Notification No. 36/1998 till the question of applicability of the Notification to M/s PGO Processors Pvt Ltd was determined by the Commissioner of Central Excise Jaipur-II after giving adequate opportunity of hearing in accordance with law. I find that Hon'ble High Court has ordered clearance of the goods on provisional basis till the decision is taken by the Commissioner on applicability of Notification No. 36/1998. The Commissioner has decided the matter finally vide Order No. 26/2012 dated 30.3.2012 holding that the provisions of Notification No.36/1998 and No.42/1998 are not applicable to M/s PGO Processors Pvt. Ltd. 9. As r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. He also recorded that manpower was provided by Suzuki Processors to PGO Processors. So also benefit of Notification No.36/98 and 42/98 was not available to the appellant for which direction for pre-deposit of Rs. 5 crores was required to be ordered. 13. Learned Counsel for the appellant submits that Suzuki Processors and PGO Processors Pvt. Ltd. are two independent concerns and PGO Processors was paying duty on the output supplied to Suzuki Processors. Accordingly, there is no question of considering PGO Processors to be a unit of Suzuki Processors discarding independent existence of the former which operated under separate registration independently till 31.3.2012. Revocation of registration does not ignore existence of PGO Processors during impugned period. 14. It was also argued that M/s. PGO Processors Pvt. Ltd. was not at all a unit of Suzuki Processor and following the judgement of Hon'ble Apex Court in the case of Rajasthan Spg. Reported in 2007 (218) ELT 641 (S.C.) independent status cannot be denied. Reliance was also placed on Para 4 of the Tribunal's order in the case of Rajasthan Spg. Reported in 2001 (131) ELT 594 (Tri-Del.). 15. It was further contention on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that PGO Processors whether is an independent entity or not can be answered on the basis of the term of the notifications in question. Different Registration status was taken cognizance. 20. Show-cause notice does not throw light on any allegation on the proprietary interest of Suzuki Processors on PGO Processors Pvt. Ltd. and manner of control over its affairs including influence if any on valuation of goods 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. 21. 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. Revenue may seek expeditious disposal of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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