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2016 (1) TMI 150 - CESTAT NEW DELHI

2016 (1) TMI 150 - CESTAT NEW DELHI - TMI - SSI Exemption - Clubbing of clearances - whether or not the turnover of 4 SSI appellants are to be clubbed together with the main appellant for the purpose of arriving at the turnover to extend the benefit of notification 1/93-CE dated 28.02.1993 - Held that:- For the subsequent period Revenue authorities have treated the manufacturing units as separate from petitioners and thus accepted that there is a relationship of buyer and seller between the peti .....

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cturer not against two units. If the department recognizes more than one manufacturer clubbing up their turnover is not provided for in the notification. Holding that the SSI units have separate legal existence but turnover has to be clubbed for the purpose of notification no. 1/93-CE is not a tenable legal proposition. There is no clarity on this aspect for the impugned order. There is no supporting evidence for common finance and common management and there is no finding by the original author .....

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y because common electricity connection was used by both the units by itself will not make it a dummy of one another. Similarly, a common accountant or a common store room for raw materials cannot be held to be a reason for clubbing the clearances of both the units - independent existence and legal identity of the SSI units have not been disputed. In that position we find the financial and management control as discussed in the impugned order has also not been categorically established. The orig .....

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For the Appellants : Shri Balbir Singh & Shri Alok Barthwal, Advs For the Respondent : Shri Govind Dixit, DR ORDER Per B Ravichandran There are 8 appeals which are now being taken up together for decision as the issue involved is same. M/s. Kores (India) Ltd. are engaged in marketing of wide range of stationery items like staple pins etc., either manufactured by them or procured from other manufacturers. Certain investigations were conducted by the Department which resulted in the initiation .....

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SSI eligibility. The proceedings concluded by way of Order in Original dated 30.09.1998. The original authority confirmed the demands raised and imposed penalties. On appeal, the Tribunal vide final order dated 27.06.2000 confirmed the demands waived / modified the penalty. The said order was challenged in the Hon'ble High Court of Madhya Pradesh at Indore. The Hon'ble High Court vide order dated 17.11.2005 remanded the matter to the Original Authority for fresh order. Consequently, the .....

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the SSI units and appellant separately which itself shows that they are independent and separate entities. The main appellant (M/s. Kores India Ltd.) and the other appellants (SSI Units) are independent entities and have their separate existence as they are registered with various statutory authorities like Registrar of Companies, etc. As per the Companies Act no limited company can be held as a dummy unit as its existence is recognized as a company and there is no question of clubbing its fina .....

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against the Department's view that the main appellant have financial and administrative control over the SSI units and as such the value for clearances to determine the SSI Exemption should be taken together. The appellant pleads that there is no justification for such a course of action as there should be clear legal basis for that. The same was not disclosed and the exact provision which enables such clubbing of turnover is not indicated. The appellant also relied on the various case laws .....

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iners India Pvt. Ltd. Vs. CCE Nagpur-2011 (268) ELT 509 (Tri-Mum) 4. The Ld. AR on the other hand, reiterated the findings of the Original Authorities and stated that the evidence collected by the Department relating to setting up of these small scale units the administrative and financial help extended by the main appellant to the SSI units, the overall managerial and administrative relationship among the appellants will show that there is only one manufacturing facility of the main appellant a .....

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ain appellant for the purpose of arriving at the turnover to extend the benefit of notification 1/93-CE dated 28.02.1993. The Hon'ble High Court of Madhya Pradesh vide order dated 17.11.2005 directed the original authority to consider the case of clubbing in the light of the circulars issued by the Board from time to time. The Hon'ble High Court also observed that for the subsequent period Revenue authorities have treated the manufacturing units as separate from petitioners and thus acce .....

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learance of 2 or more companies if they are having common finance and management. He held the contents of the circular as not applicable to the present case. We find that the Id. Original authority has misdirected himself while considering implication of the Board's circular. While he held the appellants are having common finance and management, hence clubbing of turnover is permissible in para 69 he observed that there is no allegation in the present case that the SSI units were dummy. He o .....

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y on the ground of administrative and financial control. Even this administrative and financial control has not been categorically established except for some inferences bases on statements and correspondence. The SSI units in the present case were all independently registered Pvt. Ltd. Companies. Their existence as legal entities have been accepted as a fact by the original authority. Even if it is said that the main appellant is having certain financial and administrative influence over the SS .....

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of such provisions. Para 3 of the said notifications states that nothing contained in this notification shall apply if the aggregate value of the clearances of all excisable goods for home consumption: a) by a manufacturer from one or more factories, or b) from any factory, by one or more manufacturers had exceeded ₹ 200 Lakhs in the preceding financial year. 8. Now applying the provisions of the said para it is apparent that the original authority ordered for combining the turnover of all .....

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its along with the principal (M/s. Kores (India) Ltd.) indicates ambiguity in the demand to the effect that if there is only one manufacturer in terms of notification no. 1/93-CE the duty liability will arise only against such manufacturer not against two units. If the department recognizes more than one manufacturer clubbing up their turnover is not provided for in the notification. Holding that the SSI units have separate legal existence but turnover has to be clubbed for the purpose of notifi .....

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entities irrespective of their Directors / shareholders. We find that there is no evidence that Directors of SSI units are related with M/s. Kores (India) Ltd. as per the provision of Central Excise Act or Companies Act. The financial transactions are of Commercial terms and there is nothing to show the flow back amongst the appellants. There is no profit sharing or combined ownership of assets. This Tribunal in the case of Balsara Hygiene Products Ltd. (Supra) held that mere fact of management, .....

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