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2015 (10) TMI 1292 - CESTAT CHENNAI

2015 (10) TMI 1292 - CESTAT CHENNAI - TMI - Denial of SSI Exemption - Dummy unit - Use other's brand name - held that:- When the record itself indicates categorical statements recorded from different persons under Section 14 of Central Excise Act against assessee and there was one man show which is evident from different materials gathered by Revenue, both the units are exposed to be dummies of ACF. - Revenue has also brought out that there is certificate issued Consulting Engineer to the effect .....

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e notice, the respondents are absent today. The matter being 13 years old, it is not at all desirable to keep that pending. Accordingly, examining the record and also taking assistance of Revenue, both the appeals are disposed in the manner indicated below. 2. Revenue is aggrieved by the order passed by learned Commissioner (Appeals) on 30.4.2002 reverting the adjudication order. He framed the following issues for his consideration:- 1. Whether the seizure of trailer RG 176 found parked in the p .....

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usion was that just because the trailer was parked inthe premises of ACF that does not lead to a conclusion that ACF manufactured the trailer. Most strangely, he ignored the entire evidence what that is culled out by Revenue in their grounds of appeal bringing out categorically about placement of order, no manufacturing facility available with Rajagiri & Co. (RG). So also statement recorded from different persons to demonstrate that ACF was intimately connected with manufacture. ACF supplied .....

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ssue No.2 is concerned, Revenue's grievance is that raw materials were parked at the place of ACF and mere book entries were made to show clearance to other units which had no manufacturing facility with plant and machinery. Therefore, conclusion drawn by learned Commissioner (Appeals) as to no basis of allegation is unsustainable. 5. Against the third issue, Revenue's grievance is that whole transaction being done by one man show as has been made out very categorically in different para .....

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Vs CCE, Chandigarh reported in 1999 (114) ELT 1009 (Tribunal) has observed as follows:- "No cut and dry formulae could be established to arrive at the decision whether a group of units could or could not be considered as a single manufacturer / manufacturing entity for the purpose of small scale exemption. From the various decisions of the Tribunal, it is seen that while with reference to isolated facts, the units may appear to be distinct and separate, but when the facts and circumstances .....

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ufacture of trailers, but in order to avail SSI exemption separately RG and SA were floated solely for the purpose of evading payment of duty. 2. The statements given by Shri. A. Natesan, Proprietor of ACF, Smt. N. Saradhamani (w/o Shri. A. Natesan) Proprietrix of SA and partner of RG, Shri. V Nambi, Manager of ACF, shri. B. Amaresan, Manager of RG, Shri. G. Ravindran, Manager of SA, Shri. N. Annamalai, Proprietor of ShanmugapriyaIron Works, Shri. M. Chellaperumal, Proprietor of Vinayaga Iron Wo .....

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d that the retraction was very late and no satisfactory explanation had been adduced by the witnesses for such a long time gap in retracting their version if the initial version was not correct". In said case, the Tribunal has not accepted the retracted version. In the subject case, the Commissioner (Appeals). Trichy has ignored the statements recorded earlier. He has taken into consideration only the retracted versions, though the retraction was very late and no satisfactory explanation ha .....

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duty would also create some fictitious records to conceal his act. In the subject case, the Commissioner (Appeals), Trichy has passed orders based on such evidence produced by ACF and totally ignored the other evidences that prove the contrary. 4. SSI benefits are denied to the manufacturer using the brand name of other person. Because, in such cases, the general public would consider the other person as the manufacturer. And so, some big manufacturers might try to avail the SSI benefits through .....

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t been taken into consideration by the Commissioner (Appeals), Trichy:- (i) Shri.S Perumal, the buyer ofthe trailer with chasis No.RG.176,in his statement dated 6.2.96 has stated that he placed order only with ACF for supply of RG Trailer, the draft for payment favouring RG was handed over to one individual of ACF; the information that the vehicle was ready for delivery was given by ACF. Further, the said trailer has been seized at the premises of ACF. The guarantee Card of ACF has been issued t .....

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t No.3-A,Nethaji Road, Kurichi on 17.12.97, they found the premises locked. The premises was thereafter opened by the ownerShri.Mohammed Tharnbi and the officers did not find any machinery or equipment for manufacture of trailers. He also informed them that the premises had remained vacant after September 1996. Shri Annamalai, owner of MIS Shanmughapriya Iron Works in his Statement dated 06.01.98 deposed that, he was manufacturing trailers for RG on job-work basis since inception; as he fwd no c .....

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ted at No.3.A. Nethaji Road. Kurichi (held by RG) and there had been no manufacturing activity by him after vacation of the said premises by RG. This apart Shri.S.Perumal, the buyer of the trailer with chassis No.RG-176, in his Statement dated 06.02.98 said that, he placed order only with ACF for supply of Rajagiri & Co Trailer (the impugned item under seizure) ; the Draft for paymentfavouring RGwas handed over to one individual of ACF the information that the vehicle was ready for delivery .....

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record that Shri.Annamalai was allegedly receivingjob charges for manufacture of each trailer in a specific sum. However on a specific question that 36 trailers were shown to have been manufactured by Shri.Annamalai for RG during the year 1997-98 whereas ledger entries for payments were made only for 3 trailers in the account of RG for the said financial year, Shri. B.Amaresan, Manager, in his Statement dated 16.12.98 merely said that the manufacture by Shri Annamalai in fact took place and pay .....

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shown and alleged as manufactured by RG were in fact manufactured in the premises ofACF. (v) Shri G. Ravindran in his statement dated 15.12.98 admitted that the premises occupied by SA were owned by ACF and the power connection was also in the name of ACE In his statement given on 05.01.98, Shri Ravindran deposed that Shri Natesan, proprietor of ACF would at times check the over time accounts of SA and would sign the over time register in as much as the proprietrix Smt Saradhamani is his wife. .....

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ated 05.02.98. The copy of design approval dated 03.01.96 granted by the Transport Authority was merely a design approval for trailer and it did not throw light as to whether the unit SA possessed facility to manufacture trailers. IfinfactSA was really engaged in themanufacture of Trailers then why renewal of licence should be restricted to repair and service of tractor and trailer alone was not known. The Certificate issued by the Consulting Engineer affirmed the fact that SA had no manufacturi .....

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f as proprietor of ACF, his wife Smt Saradhamani as proprietrix of SA, and his wife Smt Saradhamani and their daughter as partners of RG ; various documents pertaining to RG were found in files kept in the premises of ACF; in the order book meant for purchase of materials there were notings commonly for all the three units ; there was common procurement of raw materials for all the units with common accountal for receipts as well as issues ; the raw materials required for manufacture of trailers .....

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as well as technical adviser to ACF had signed labour bills raised by two outside job workers for the units SA and ACF. Shri Ravindran, Manager of SA has signed the tender forms on behalf of ACE; the over time work performed in SA was occasionally supervised by Shri Natesan ; being sister units, Shri Natesan called for details of production and sales of all the units so as to know their performance and he would also offer his valuable suggestions born out of his business experience for all the u .....

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mongst the group ; (as per the deposition of Shri M.Chellaperuamal, Proprietor of M/s Vinayaga Iron Works) he had earlier worked in ACF for 10 years, he was doing job work for ACF and also welding work for ACF and RG, the welding work was normally done by him at the workshop of ACF, he would not engrave the chassis Number on the trailer since he did not know for whom it was meant; the chassis number would be engraved in the Tirunelveli Junction workshop of ACF and the payments would be received .....

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is coupled with the fact that there could have been no manufacture of trailers by RG and SA". The Commissioner (Appeals), Trichy has given undue importance to the language used by the adjudicating authority. The three units were functioning as a homogenous entity without any distinction whatsoever. In view of CEGAT's ruling in the case of MIS U.K.Machine Tools Pvt. Limited reported in 1999 (114) ELT 1009 (T), all the three units are to be treated as a single entity. The facts of the sai .....

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so common to all the units. It was therefore held that the three units were not separately eligible for SSI exemption and the clearances of the two units should be clubbed with the parent unit. While taking the decision, the Hon'ble CEGAT relied on a catena of decisions rendered by the CEGAT and Supreme Court in various cases earlier. The CEGAT in the order aforesaid, has inter alia observed as under: 'For the purposes of small scale exemption, the manufacturer did not mean the separate .....

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er, they were dependent on each other, in their operations, dominant role was of Shri R.K.Luther, Proprietor of ……' The facts and circumstances dealt with in the order of CEGAT bear close relation to the facts of the subject case. 7. In the case of M/s Akay Filtips Pvt. Ltd., reported in 2000 (122) ELT 761 (T), the CEGAT has observed that "…………… The Commissioner finds this to be correct and concludes the unity in the financial management .....

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ot advance the appellants case. Such common financial control and management would necessarily not present features of flowback; it would, in fact, render such a requirement unnecessary. 8. The contention of the assessee that in as much as AA had been excluded from the purview of the proceedings, the other forms RG and SA should also be freed from the case did not have any legal support. 881 declaration filed by them were nothing but mis-declarations for the purpose of cheating the department. U .....

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