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2016 (7) TMI 892 - CESTAT HYDERABAD

2016 (7) TMI 892 - CESTAT HYDERABAD - TMI - Claiming SSI exemption through creating dummy units - clubbing of clearance of different units - Held that:- it is clear that the Commissioner has taken into account all the allegations and contentions and arrived at a conclusion that M/s Andhra Poly Pack is an independent unit and their clearances cannot be Clubbed with that of respondent herein. We have to agree that there is no evidence to establish any mutuality of interest between the two units. - .....

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penalty on appellants besides separate penalty of ₹ 5000/- on M/s Andhra Poly Pack. 2. The respondent, M/S Vizag Poly Packaging Industries (VPPI) are manufacturers of HDPE/PP woven bags/sacks and is availing concessional rate of duty under SSI exemption. It is an unregistered partnership firm established in 1995, and consists of two partners viz: Shri Pradip Kumar Nahata and his younger brother Dilip Kumar Nahata. M/s Sri Andhra Poly Packs (APP) are also manufacturers of HDPE/PP woven bags .....

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f accounts of M/s Andhra Poly Pack was maintained in the computer system of respondent. These together with comparison of value of clearances of both units, the department was of the view that M/s Andhra Poly Pack was created as a dummy unit to manufacture similar products when respondent unit was likely to exceed the SSI limit of ₹ 50 lakh and thus to avail the benefit of SSI exemption illegally. After clubbing the clearances of both units for the period from 1999-2000 to 2004-2005 it wor .....

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clearances of two units. A demand of ₹ 15,929/- was confirmed on the charge of clandestine clearances by respondent along with interest and imposed equal amount of penalty. A penalty of ₹ 5000/- was imposed on M/s Andhra Poly Pack was suppressing value of clearances. The Revenue is in appeal against this order. 4. The learned AR, Ms C. Changsen strongly contended that there was sufficient evidence that M/s Andhra Poly Pack was dummy unit of respondent. She argued that on verificatio .....

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s of M/s Andhra Poly Pack protected by pass-words. That it is clear that sales were diverted to M/s Andhra Poly Pack so as to keep both units within SSI limit. She pleaded that the appeal may be allowed. 5. None appeared on behalf of respondent, even though notice was issued repeatedly. Being an old matter of 2007, the case was taken for disposal after hearing AR and perusal of records. 6. The department lays emphasis on the facts that accounts of both units are centralized and maintained at one .....

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system of their own. It is stated by Shri Pradip Kumar Nahata, Magaging Partner of respondent unit, that the records of M/s Andhra Poly Pack is kept in their premises since M/s Andhra Poly Pack does not have office of their own. The weighing scale, telephone are used by M/s Andhra Poly Pack, but no charge is collected. That M/s Andhra Poly Pack is a proprietorship concern owned by his wife. 7. The commissioner, in the impugned order has elaborately discussed the statements, evidence and the lega .....

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erms of profit sharing, management control, decision making, and acts of such nature. Common use of machinery is taken as a relevant factor if it was proved that one unit did not have sufficient machinery to manufacture the goods on its own and it was using the machineries of the other unit and accounting for the production in its account to avail the SSI exemption. Inter-related units having common facilities have been examined in the concept of the dummy nature of the unit, machineries require .....

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