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TMI Blog2007 (2) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 69 of the Central Excise Tariff Act, 1985. Inasmuch as both the said units are located in the same premises, the said premises were visited by the Central Excise officers on 19-12-1997. As a result of various checks and verifications, officers entertained a view that though both the units exist separately on paper, factually they are one and the same. Accordingly the records maintained by both the units were seized under Panchnama dated 19-12-1997. Statement of Shri Denish Motilal Patel, Managing Partner of Umiya Ceramic was also recorded on 19-12-1997 wherein he deposed that he is partner of Umiya Ceramic and Manager of Mor Ceramic drawing a salary of Rs.1000/-; he is holding Power of Attorney of Mor Ceramic; that the factory premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t payment of any rent etc. The said show cause notice culminated into an order passed by Additional Commissioner of Central Excise vide which he held that the clearances of both the units are to be clubbed. Accordingly, he confirmed the demand of duty of Rs.5,18,349/- against Umiya Ceramic along with confinnation of interest and imposition of personal penalty of identical amount under Section 11AC of Central Excise Act, 1944. In addition personal penalty of Rs.3 lakhs imposed upon the appellants in terms of provision of Rule 173Q(1) of Central Excise Rules. Personal penalty of Rs.3,50,000/- was imposed upon Mor Ceramic under Rule 173Q and of Rs.2 lakhs each was imposed upon Shri Denish Motital Patel, partner of Umiya Ceramic and Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The starting point of the adjudication was the visit of the officers in the said premises, where both the units are located. Panchnama drawn at the time of visit of the officers, in the presence of Panchnama revealed that there was no Board or any type of writing showing the existence of Mor Ceramic. It was further revealed, as recorded in the Panchnama that Umiya Ceramic was firing the raw bricks in the kiln owned by Mor Ceramic. It was, further, disclosed that since fire bricks are not having any identification mark, it cannot be ascertained that which stock of bricks belong to which factory. Panchnama also shows that the files belonging to two units were found lying in the same office premises of Umiya Ceramic and were recovered from on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis for clubbing the clearances of two units. However, in the present case we find that the two units i.e. Umiya Ceramic and Mor Ceramic were not independent of each other in spite of the fact of their separate registration with the other Government authorities. Process of manufacture of bricks as detailed in the appeal memo show that the raw material for the bricks is clay in lumps, calcined Bauxite and Grog, i.e. broken pieces of rejected refractory bricks. Of the said three raw materials clay and grog are put in a grinding machine, i.e. the distintegrator and are grinded into a homogenous mixture. The said mixture is than mixed with calcined Bauxite and then it is put in a padmill, where it is mixed with water. The said mixture is then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use, being that both the units belong to the same family. Further, it is noticed that no sign of existence of Mor Ceramic in the said premises was found at the time of visit of the officers as recorded in the Panchnama. Stock belonging to both the units was admitted to be common. As such in our view it has to be held that Mor Ceramic was only a paper creation and a facade. Mere fact that the said Mor Ceramic was registered with the other Government departments is only a factor to show that Umiya Ceramic took steps towards establishing the said unit different and separate from Umiya Ceramic. Tribunal in the case of Double Bee Enterprises v. CCE, New Delhi - 1995 (78) E.L.T. 261 (T) in identical facts and circumstances has held that clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e observations of the appellate authority are self contradictory. On one hand he is holding Mor Ceramic to be a dummy unit and on the other hand penalty is being upheld on the same in spite of his observation that no penalty can be imposed on dummy unit. Inasmuch we have held that Mor Ceramic was not a complete and independent unit but was dummy of Umiya Ceramic, imposition of penalty upon Mor Ceramic is neither legal nor justified. The same is accordingly set aside. 8. As regards penalty upon Shri Denish M. Patel we find that he was Managing partner of Umiya Ceramic and has been held to be main protagonist of the entire 'episode' who stage managed the show. As such he is liable to penalty, specially in view of the fact that penalty impose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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