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2016 (8) TMI 4 - CESTAT BANGALORE

2016 (8) TMI 4 - CESTAT BANGALORE - 2016 (343) E.L.T. 1182 (Tri. - Bang.) - Duty liability - job worker is liable to discharge the liability or the principal - related parties - dummy job workers - Held that:- the respondents cannot escape from their liability of payment of Central Excise duty in this case, especially when for the purpose of Central Excise, there is a clear-cut finding that respondents and their job worker viz., M/s. Ashok Bagi and Associates are one and the same having common i .....

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of duty for the subject goods has to be computed after granting the benefit of Notification No.8/2003-C.E. - Decided partly in favor of assessee. - E/407/2007-DB - Final Order No. 20562/ 2016 - Dated:- 15-7-2016 - Shri S. S. Garg, Judicial Member And Shri Ashok K. Arya, Technical Member Mr. Mohammed Yousuf, Addl. Commissioner (AR) For the Appellant Shri Anil Kumar.B, Advocate AKB Associates Advocates & Consultants For the Respondent ORDER Per Ashok K. Arya This case concerns with the cleara .....

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ues that job worker viz., M/s. Ashok Bagi and Associates and the respondents namely M/s. Pilani Envirotech Pvt. Ltd. (PEPL) are related, whereas Commissioner (Appeals) held that job worker and respondents are not related. The appellant also argues that the clearances effected by the job worker viz., M/s. Ashok Bagi and Associates are actually by the respondents themselves, when Smt. N.A. Bagi, Director with the respondent-company admitted in the statement that the respondents and the job worker .....

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ed order has erred by not appreciating the facts on record. 3.1 It was also mentioned by the appellant that subsequently the respondents obtained Central Excise registration on 12.1.2006 and discharged their duty liability for the year 2005-06 and 2006-07. 4. The respondents viz., M/s. Pilani Envirotech Pvt. Ltd., Dharwad is represented by the learned advocate Mr. Anil Kumar. B of M/s. AKB Associates. Learned advocate has mainly argued that the respondents viz., Pilani Envirotech Pvt. Ltd. are t .....

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.L.T. 161 (SC) b) Applied Industrial Products Pvt. Ltd. vs. CCE: 1992 (61) E.L.T. 364 (Kar.) c) AFL Pvt. Ltd. vs. CCE, Mumbai-II: 2013 (295) E.L.T. 211 (Tri.-Mumbai) d) Commissioner of Customs & Central Excise, Surat-I vs. Kalpana Silk Mills: 2011 (134) E.L.T. 373 (Tri-Mumbai). 4.1 The respondents in their reply (which is on record) to the show-cause notice dated 3.4.2006 also state that: As much we are eligible for the full exemption upto ₹ 100 lakhs under the Notification No.8/2003-C .....

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ter deducting ₹ 100 lakhs from the total sales during 01.04.2005 to 07.12.2005. Thus, the total sales on which duty can be demanded will beRs.1,18,92,118/- only and not the amount which has been alleged in Para 3 of the SCN. We rely on the case law in respect of Pattern Tex vs. CCE, Vadodara, 2001 (128) ELT 286 (Tri.-Mum) wherein it is held that, SSI exemption under Notification No.175/86-C.E. not deniable for failure to file declaration for exemption from registration under Rule 174A of C .....

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t the respondents and the job worker viz., M/s. Ashok Bagi and Associates are one and the same and the clearances by any one of these i.e., either by M/s. Ashok Bagi and Associates or by the respondents is by one person only. The appellant has also emphasised that the Director in the respondent-company has admitted that the respondent and M/s. Ashok Bagi and Associates (job worker) are related. 5.2 However, the respondent s main argument is that they are not related and they are independent and .....

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d. (PEPL). It is evident from this that the invoices raised by PEPL represents the clearances effected from M/s. Ashok Bagi & Associates. As such it can be seen that the clearances are being effected not by Shri Ashok Bagi but by M/s. Pilani Enviortech Pvt. Ltd. and M/s. Ashok Bagi & Associates are related units and further that Pilani Envirotech Pvt. Ltd. as a Dummy unit operates from a residential place but claims itself as manufacturers of the impugned excisable goods in its delivery .....

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was found on verification that the address of PEPL is nothing but the residential place of Shri Ashok Bagi, the so called job worker. All these are definite indicators evidencing that PEPL have in fact undertaken manufacture and clearances of excisable goods in contravention of the Central Excise Rules, 2002. 5.3.1 Respondents have argued that their job worker viz., M/s. Ashok Bagi and Associates are independent entities and cannot be treated as one and the same. In this regard, they have cited .....

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the respondents has also cited the decision of Hon ble Supreme Court in the case of CCE, Baroda vs. M.M. Khambhatwalla (supra) but we find that this case concerns with the goods produced by household ladies in their own premises where sale proceeds were sent to the respondent and would not be applicable to the present facts. For the present facts, the findings of the original adjudicating authority are clear that respondents (M/s. PEPL) and M/s. Ashok Bagi and Associates ( job workers ) are not .....

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gem in order to evade the duties of Central Excise, which are due to national exchequer. 5.5 The learned advocate for the respondents also argues that Commissioner (A) is right in holding that the question of their relation or interconnectedness is not relevant as the issue of duty liability is approached from a wrong angle, when there is no evidence of department having held the job workers responsible for discharge of duty liability . We cannot agree with this logic of the Commissioner (A) whe .....

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the decisions relied upon by the learned advocate would not be applicable to the facts on record concerning the respondents. It is to be noted that the facts on record cannot prove that the respondents are only mere traders, when the record and facts evidently indicate that they are manufacturers too and would be liable to pay duties of Central Excise for their manufacture(s). The decisions of Hon ble Supreme Court in case of Shree Agency vs. S. K. Bhattacharjee: 1977 (1) E.L.T. (J168) (S.C.) a .....

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