TMI Blog2014 (10) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... .K. Paliwal, JJ. For the appellant : Shri R.T. Thanevala, advocate For the respondent : Shri Prasanna Prasad, advocate ORDER They are heard. By this appeal under Section 35 G of the Central Excise Act, 1944, the appellant is challenging the final order No.57136/2013 (PB) dated 18.07.2013 passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi in Central Excise Appeal No.1966/2005. 2. Brief facts of the case are that appellant M/s. Parag Fans Cooling Systems Limited, Dewas are engaged in manufacture of FRP Fans / FRP Cooling Tower falling under Chapter Heading No.8419.20 of the Schedule to the Central Excise Tariff Act, 1985 (in short CETA ) and M/s. Parag Industries are engaged in the manufacture of CI Casting falling under Chapter Heading 7325.10 of the Schedule of CETA, 1985. 3. During the financial year 1997 98, the appellant availed Small Scale Industry Exemption under Notification No.7/97 CE dated 01.03.1997. Simultaneously, other firm M/s. Parag Industries separately and independently availed SSI Exemption during the same financial year. The Central Government issued four show cause notices on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of Unit No.2 or vice versa. Learned Tribunal considering the fact that operating result as well as asset and liability of both the concerns were consolidated in the financial statement (balance sheet) of the appellant. Statement recorded from Shri Bhargav on 22.07.1997 proves that there was a consolidated profit and loss account prepared for both the units. That consolidated statement enabled the appellant to avail loan from financial institutions. The income tax assessment of both the units was jointly made because of consolidated accounts filed by the appellant before the income tax authority. The learned Tribunal set aside the order passed by the Commissioner (Appeals) and allowed the order of adjudicating authority. 8. It is submitted by the learned counsel for the appellant that the question involved in this appeal is squarely covered by the decision of the Apex Court in the case of Rollatainers Limited v. Commissioner of Central Excise, Delhi III [2004 (170) ELT 257 (SC)]. The Apex Court has held that two factories within same premises, same owner and common balance sheet with common boundaries, but having separate staf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fact on record that that M/s. PEL advanced an interest free loan of ₹ 1 crore to the appellant, which was used for purchase of raw material by the latter (As evidenced from the balance sheet). Furthermore, the flavours being manufactured by the appellant were developed by M/SPEL at their R D Lab at Bombay, whose services were at the disposal of the appellant. They were at one point of time were manufactured by M/s. PEL and admittedly owned by them. Clearly, all this points to the inescapable conclusion that the three companies in question were intertwined in their operation and management. A careful scrutiny of the records therefore establish that both the aforesaid two basic features are overwhelmingly present in this case. Therefore it would likely seem that the purported fragmentation of the manufacturing process was but a mere ploy to avail of the SSI exemption. Piercing the corporate veil, when the notions of beneficial ownership and interdependency come into the picture, are no longer res integra. On this count, therefore, we have no hesitation whatsoever in affirming the order of the Tribunal, which was just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove the connection in the course of trade between the flavours and the entity using the flavours through code names. Furthermore, the ownership of the code names by M/s PEL Ltd. is clearly evidenced from the fact that these flavours were developed, researched and concocted by M/s. PEL Ltd in its research labs. That M/s. PEL Ltd. have given the brand names to the flavours and allowed them to be manufactured by the appellant, their holding company cannot hide the fact that M/s PEL Ltd were in fact, the owner of the code/brand names. This conclusion is fortified by the fact that it was M/s PEL Ltd who transferred the right of the codes when they were sold to M/s. Coca Cola Company in November, 1993. Since the appellant was not the owner of the said brand names in question, the Tribunal was justified in holding that the appellant will not be entitled to the benefit of Notification No. 175/86 and 1/93 for the products with code names G 44T, L 33A, T IIPC, T IIP, R 66M and K 55T which belonged to M/s PEL Ltd. 10. He also placed reliance on the decision in the case of Commissioner of Central Excise, New Delhi v. Modi Alkalies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtance. While the supply by MACL to three companies was ₹ 0.50 per unit, the sale price by the three companies was ₹ 5 per unit. It is on record that accounts were kept by common staff and marketing was done under the supervision of a person who belongs to the same group of concerns. The amounts have been collected by an employee of MACL. The so called Directors of the companies were undisputedly employees of MACL. Almost the entire financial resources were made by MACL. The financial position clearly shows that MACL had more than ordinary interest in the financial arrangements for companies. The statements of the employees/Directors show that the whole show was controlled, both on financial and management aspects by MACL. If these are not sufficient to show inter dependence probably nothing better would show the same. The factors which have weighed with CEGAT like registration of three companies under the sales tax and income tax authorities have to be considered in the background of factual position noted above. When the corporate veil is lifted what comes into focus is only the shadow and not any substance about the exi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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