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TMI Blog2016 (5) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant M/s Polybelt Technologies which is a partnership concern. The period involved in all the appeals is 17.08.96 to March- 2007. 2. The facts of the case are that Appellant M/s. Polybelt Technologies India a partnership concern is engaged in the manufacture of Nylon sandwich Power Transmission Belt. They have been classifying their product under chapter heading 3926.90 of the Central Excise Tariff Act and were making clearance under Nil rate of duty by claiming SSI Exemption in terms of Notification No. 175/86 CE dt. 01.03.86 as amended and subsequent analogus notifications. Initially they were issued show cause notice dt. 03.05.1997 wherein it was proposed to club their clearances and of one more unit M/s Transcon International (which was taken over in July 96) with M/s NTB International Pvt. Ltd. on the ground of control of M/s NTB over M/s Polybelt, mutual flow of funds, clearance of goods manufactured by M/s NTB in the name of M/s Polybelt and that the goods, market and sales of M/s Polybelt and M/s NTB are common. The statements of employees and related persons of M/s Polybelt and M/s NTB were recorded. The show cause notice alleged that the units are single entity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1325-1330/02 and concessions made by the Ld. Advocate in regard to clubbing etc. for the earlier period. In addition the following points urged by the appellants need to be considered at the time of fresh adjudication :- (i) No show cause notice has been issued for the impugned periods to M/s NTB International though small scale exemption is sought to be denied to M/s Polybelt Technology by clubbing clearances. (ii) Clubbing cannot be done for subsequent period on the basis for such clubbing for an earlier period. At the time of fresh adjudication the Appellants shall be at liberty to produce all relevant documents and case laws and the department shall also be at liberty to determine whether the financial and other arrangements existing between the concerned units have undergone any change in the subsequent period. The impugned orders are set aside and both the matters are remanded back to the jurisdictional Commissioner specifically for fresh adjudication to avoid multiplicity of proceedings before him and his Assistant Commissioner. The Appellant shall be allowed a reasonable opportunity of being heard before passing a fresh order. 2.2 The Commissioner vide Order-in-Orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of denial of SSI Exemption to M/s Polybelt Technologies India he submits that in the matter of previous show cause notices which were decided by the adjudicating authority vide Order-in-original No. 38/2001 Commr. M-VI dt. 31.12.2001 and upheld by the CESTAT in appeal No. E/1325-1331/02, the demands were made against M/s NTB International by clubbing the clearances of Appellant holding, that the Appellant is fragment of M/s NTB international. That whereas in instant appeals no show cause notice was issued to M/s NTB International and the demand has been made from Appellant which essentially means that the independent existence of Appellant M/s Polybelt Technologies is recognized by the revenue. That if the Appellant has no existence, in that case no demand should have been made and confirmed against them. He relies upon the judgment of M/S Gajanan Fabrics Distributors Vs. CCE, Pune 1997 (92) E.L.T. 451 (S.C.) to support his contention. 3.1 He further submits that in the present appeals without specifying the quantum of turnover of M/s NTB International the demand has been made and thus the show cause notices are vague. That in subsequent period there was no transfer of fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment has confirmed the demand for period prior to show cause notice involved in the present appeals on M/s NTB International as actual manufacturer and the Appellant M/s Polybelt Technologies as dummy unit as can be seen from the remand order dt. 01.09.2004. That in the present proceedings which is for the subsequent period, the duty demand has been made from Appellant only by treating NTB as its subsidiary. Thus the department has by its own action has admitted that both the companies are in existence and factually it is correct that the Appellant has own factory at Plot No. A-404, Wagle Industrial Estate, Thane with complete set of machines and independent financial arrangement. M/s NTB International is an independent manufacturing factory at plot No. A 302, Road No. 32, Wagle Industrial Estate, Thane. Thus when the two separate central excise registration have been granted to two independent manufacturers and it is not the case that the Appellant is selling goods to NTB or that NTB is selling its goods to Appellant, then both have independent existence. That under such factual matrix the demand of duty from Appellant is illegal. He relies upon the judgment of Bentex Ind. Vs. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh small scale exemption is sought to be denied to M/s Polybelt Technologies India by clubbing clearances and that whether Clubbing canbe done for subsequent period on the basis for such clubbing for an earlier period. The adjudicating authority while deciding the issues in remand proceedings and also while adjudicating other show cause notices has given findings that the non issue of show cause notice to M/s NTB international is purely technical and also relied upon the earlier investigation and thereby confirmed the demands against the Appellant. In the appeals before us for the subsequent periods, the lower authorities adopted same analogy and confirmed the demand which was upheld by the Commissioner (Appeals). We find that the appellant were issued show cause notice even though their clearance was sought to be clubbed with M/s NTB International. Thus once the Appellant concern is alleged to be dummy concern/ fragment of M/s NTB International in that case the demand should not have been proposed against M/s. Polybelt as in the eyes of the revenue the Appellant has got no independent existence. We thus find that the impugned orders suffers from serious infirmity on this count. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri.)], wherein it is held in paragraphs 4 and 5 that for the purpose of demand clubbing of clearance of units unjustified while duty confirmed against each constituent unit. Demand may be confirmed against a single unit. In both these cases, the matter was remanded to the Commissioner, Pune to hear and send the show cause notice afresh in the light of the law settled by the judgment of the High Court and the Supreme Court up to date with parties to file additional documents if they so chose and the remand was unlimited. The matter is required to be decided independently. In the precedent Bench order indication is given that the Commissioner shall give adequate opportunity to the party to state the case and the appellant shall cooperate with the Commissioner. As against this, the ld. JDR has not submitted anything. So under these circumstances the contention of the appellant gains weight and it has to be and is accepted. The impugned order cannot sustain and it requires to be set aside only on this count. Regarding the reversal of the notional higher credit by the appellant as per the impugned order in clause (2) it depends upon the finding of the Collector/Commissioner (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clubbed with the clearances of JTPL. 8. We find that the Appellant from the very beginning has been contending that they have separate factory with machinery and set up. They have also been contending that there is no mutuality of interest between them and M/s NTB International and the facts relied upon for confirmation of demands in previous period no more exists. Further that the Appellant is partnership firm and M/s NTB international is a Private Ltd. Company and therefore they cannot be clubbed. The adjudicating authority has not considered any of these aspects and confirmed the demand against the Appellant firm by clubbing it with M/s NTB International which is illegal. We are therefore of the view that on this ground also the demand against the Appellant is not sustainable. Our views are also supported by the judgment of this Tribunal in the case of M/s Bentex Industries Vs. CCE, New Delhi 2003 (151) E.L.T. 695 (Tri. - Del.) wherein it was held that: 5. The bare perusal of the impugned order shows that the learned Commissioner has clubbed the clearances of both the companies named above, broadly on the grounds; that both were working in the same building, had a shared sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the financial flow back from one company to another. Mere sharing of company telephone, office, labour, on certain occasions receipt of raw material, etc., as detailed in the impugned order were not sufficient in the eyes of law to club the clearance of both the units. In the case of Indian Metal Industries v. CCE, Bhubaneshwar, 1999 (108) E.L.T. 593 (Tribunal), it has been observed that financial flow back between the two units is essential for clubbing their clearances. Similarly, in the case of CCE, Rajkot v. Amar Plast Industries, 2000 (115) E.L.T. 482 (Tribunal), it has been ruled that use of common premises, telephone, common electric generator and cutting/mixing machines are not enough for clubbing the clearances of both the units. 8. Regarding use of the brand name by the two units, it has been observed by the Tribunal in the case of Arvind Nanda v. CCE, Meerut, 2001 (136) E.L.T. 416 (Tribunal), that the same cannot result in clubbing of the clearances of both the units. Similarly, in the case of Karnataka Gears (P) Ltd., Concord Steel Works Ltd. v. CCE, Bangalore, 1999 (110) E.L.T. 529 (Tribunal) = 1998 (29) RLT 543 (T), it has been held by the Tribunal that just becau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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