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2016 (3) TMI 898 - CESTAT AHMEDABAD

2016 (3) TMI 898 - CESTAT AHMEDABAD - 2016 (337) E.L.T. 157 (Tri. - Ahmd.) - SSI Exemption - Clubbing of clearance value of the proprietaryship firm with the private limited company - imposition of penalty on dummy units - Held that:- On perusal of the list of machineries, we find that these machineries were purchased during the period 1990 to 2001. The learned Advocate fairly submits that these lists were not placed before the Adjudicating authority. It is submitted that these lists were submit .....

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e lower authorities and therefore, such evidence cannot be accepted before the Tribunal, at a belated stage. To sum up, it is evident from the records that there was no manufacturing activity in other units. Hence, the Adjudicating authority rightly clubbed the clearance value of other units with M/s BEW. - Imposition of penalty on the dummy units cannot be sustained. According to the Revenue, the other units are dummy and therefore, imposition of penalties on the dummy units cannot be susta .....

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Shri Babubhai Mistry and Smt. Jasuben Mistry are reduced to ₹ 1 lakh (Rupees One Lakh only) and ₹ 50,000.00 (Rupees Fifty Thousands only) respectively. The penalty imposed on M/s CEPL and M/s Hitech, M/s BEW are set aside. The Assessee is entitled to pay penalty 25% of the duty alongwith entire amount of duty and interest within 30 days of communication of this order as provided under Section 11AC of Central Excise Act, 1944. The appeals of M/s Hitech, M/s BEW and M/s CEPL are allowe .....

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Proprietress Smt. Jasuben Babubhai Mistry, wife of Shri Babubhai Mistry, was engaged in the manufacture and sale of Ferrous & Non-ferrous Casting Machinery used in the Sugar Mills, Bio-gas Plants and Paper Mills. There were other firms M/s Hitech Engineers & Fabricators (in short M/s Hitech, Proprietor Shri Umeshbhai Mistry, son of Shri Babubhai Mistry), M/s Bhavani Engineering Works (in short M/s BEW, Proprietor Shri Babubhai Mistry), and M/s Chamunda Engineering Pvt Ltd, a Private Lim .....

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ses viz. the Assessee, M/s Hitech, M/s CEPL and M/s BEW. It was noticed that there was a common entrance and exit as well as common land, building, plant and machinery, raw material, electricity, telephone, fax, office, office equipments etc. The said officers recorded the statements of Shri Babubhai Mistry and Shri Umeshbhai Mistry on different dates. It has also prepared the Panchnama, dt.07.02.2005. They have also recorded the statements of their employee Shri Mahendrabhai V. Shah and Proprie .....

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M/s CEPL, M/s Hitech and M/s BEW. The Adjudicating authority confirmed the demand of duty of ₹ 22,06,067.00 alongwith interest and imposed penalties of equal amount of duty on the Assessee. It has also imposed penalties of ₹ 2 lakh each as follows:- a) M/s Chamunda Engineering Pvt. Ltd. b) Shri Babubhai Mistry, Director of M/s CEPL and Proprietor of M/s BEW. c) Smt. Jasuben B. Mistry, Proprietor of the Assessee and Director of M/s CEPL. d) M/s Hitech e) M/s BEW. 4. The learned Advoca .....

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hops and Establishment Act. All these units are separate income tax assessees showing their own turnover. He also submits that all the units issued invoices separately and he drew the attention of the Bench to the specimen copies of the invoices. He further submits that there is no evidence of financial flowback between the units and therefore, clubbing of clearance is not permissible. It is submitted that both the authorities below proceeded on the basis that the other units have no machinery. .....

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LT 509 (Tri-Mum) iv) CCE Pondichery Vs Servo Packaging (P) Ltd-2007 (210) ELT 355 (Tri-Che) v) M/s Sree Andal & Co. Vs CCE Trichy-2003 (154) ELT 448 (Tri-Che) 5. On the other hand, the learned Authorised Representative on behalf of the Revenue submits that as revealed from Panchnama, dt.07.02.005 that there was no machinery physically available in the two units M/s CEPL and M/s BEW. All units were working in the same premises. There were no electricity meters in the name of M/s BEW, M/s CEPL .....

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ty rightly imposed penalty on all the units. 6. After hearing both the sides and on perusal of the records, we find that the main contention of the learned Advocate is that the Assessee and M/s Hitech were registered with Central Excise Department in 1994. On a query from the Bench, the learned Advocate fairly submits that subsequently, they Assessee was availing benefit under SSI exemption and therefore, they surrendered their registration. We find that on 07.02.2005, the Central Excise Officer .....

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The two electricity meters were in the name of Hitech and another in the name of Mahaxmi Industrial Estate, which were being paid by the Assessee. These facts are corroborating with Panchnama dt.07.02.2005. 7. The learned Advocate on behalf of the Appellant submits that the Panchnama was not prepared properly and in a haphazard manner. He also drew the attention of the Bench to the list of machineries of the Assessee, M/s BEW and M/s CEPL. On perusal of the list of machineries, we find that the .....

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had not placed these documents before the lower authorities which are related to the period 1990 to 2001. The Assessee has not given any reasons as to why they have failed to disclose these evidences before the lower authorities and therefore, such evidence cannot be accepted before the Tribunal, at a belated stage. To sum up, it is evident from the records that there was no manufacturing activity in other units. Hence, the Adjudicating authority rightly clubbed the clearance value of other uni .....

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ers (India) P. Ltd. (supra), the Tribunal observed that there was no allegations made of mutuality of interest/inter-dependence between the two companies. Records showing that money as loan given by one to the other was repaid alongwith interest, and transactions were done by cheques. In the case of Sree Nirmal Spinners (supra), the Tribunal held that profit and loss account of appellant show payment of conversion charges, lease rent for use of machinery, separate registration for each unit unde .....

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