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2016 (9) TMI 1094 - CESTAT NEW DELHI

2016 (9) TMI 1094 - CESTAT NEW DELHI - TMI - SSI exemption - wrong availment of Exemption benefit - Notification No.175/86-CE and 1/93-CE - denial of SSI notification - clubbing of value of clearances - impugned order does not hold one person as the manufacturer and the others as dummies - Held that:- the manufacture and clearances made by the respective noticees/appellants - M/s Atlantic Chemical Industries, M/s Foamsil Chemicals (not appellant here) and M/s Arun Chemicals for the item namely R .....

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etary concerns), are under common management and closely controlled by only one person Shri J.S. Jain, who is one of the appellants here. The facts and circumstances have warranted to examine the reality of these units; and after going behind the mask of these entities, it has been revealed that activities of these units i.e. manufacture, clearance etc. has to be clubbed together supported by the decision of Hon'ble Supreme Court in the case of Calcutta Chromotype Ltd. vs. C.C.E., Calcutta [1998 .....

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2) and 173Q of Central Excise Rules. We are giving no specific findings on M/s Foamsil Chemicals as they are not the appellant here. - It is clear that noticee appellants M/s Atlantic Chemicals played a major role in the manufacturing of the item RBA. Many of the machinery items and facilities for manufacturing are available only with M/s Atlantic Chemicals. Therefore, after clubbing of clearances of the subject three units, liabilities for payment of duty of Central Excise is hereby fixed o .....

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ongly claiming exemption Notification No.175/86-CE ; therefore, the penalty of ₹ 1,20,000/- imposed on them is hereby sustained. - Demand and imposition of penalties - RBA manufactured and not accounted for - removed clandestinely in the guise of soda bicarbonate - Held that:- the retractions and modifications do not matter when overall evidences conclusively prove that appellants in fact cleared their product RBA in the guise of soda bi carb thus evading central excise duty. It has al .....

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Atlantic Chemicals and Arun Chemicals, were received for further disposal by the Ceyenar Chemicals, India Rubber & Chemicals and Lotus Chemicals. It is evident that Ceyenar Chemicals, Inda Rubber & Chemicals and Lotus Chemicals had sold the said goods to various hawai rubber sheets manufacturers and also collected the differential amount between the price of such supplied RBA and price of Soda bi Carb and arranged then remittance to Atlantic Chemicals and Sh. J.S. Jain. In their defence submissi .....

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o penalty under Rule 209A of the CER”. - Penalties imposed in the impugned order on M/s Atlantic Chemicals (of ₹ 29 lakhs) and on M/s Arun Chemicals (of ₹ 6 lakhs) are modified and we instead impose the penalty of ₹ 35,00,000/- (Rupees thirty five lakhs only) on M/s Atlantic Chemicals only in this regard under Rule 9(2) and Rule 173Q of the Central Excise Rules. Further, it is to be noted that M/s Arun Chemicals along with M/s Atlantic Chemicals and others has been actively .....

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ra production is based solely on the ‘test reports’ and the Revenue has not been able to give any other corroboratory evidence to support this charge of extra production against the respective assesees. Further, when M/s Arun Chemicals do not have required manufacturing facility available with them there cannot be any production of RBA on record by them. Moreover, unless there are sufficient corroboratory evidences on records to support this charge of extra production of RBA (based on the test r .....

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(based on sample test reports) by the noticees namely, Atlantic Chemicals, M/s Foamsil Chemicals and M/s Arun Chemicals remain unsustainable and hereby dropped. Consequently, the penalties imposed on the respective noticees are also not sustainable and are hereby dropped. - Imposition of penalties - Held that:- we are of the considered view that there is no reason to interfere with the above penalties. The impugned order has rightly imposed these penalties on the respective noticees appell .....

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llants: a) Amar Enterprises b) Mr. J.S. Jain c) Mr. Amar Kumar Jain d) India Rubber & Chemicals e) Lotus Chemical89 f) Ceyenar Chemicals g) Arun Chemicals h) Atlantic Chemical Industries. 2. These appeals are against common impugned order dated 25.6.2004 passed by the Commissioner, Central Excise (Adjudication). In the impugned common order, there are demands of Central Excise duty confirmed along with imposition of penalties against M/s Foamsil Chemicals also but presently before us there i .....

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firmation of demands of Central Excise duty, following penalties have also been imposed under Rule 9(2) of the Central Excise Rules read with Rule 173Q of the Central Excise Rules: i) Penalty of ₹ 35 lakhs on Atlantic Chemical Industries; ii) penalty of ₹ 27 lakhs on Foamsil Chemicals; iii) penalty of ₹ 22 lakhs on Arun Chemicals. 3.2 The impugned order also confirms the demand of Central Excise duty under Rule 9(2) of the Central Excise Rules read with Section 11A of the Centr .....

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f ₹ 35,50,000/- on Atlantic Chemical Industries; (ii) Penalty of ₹ 27 lakh on Foamsil Chemicals; (iii) Penalty of ₹ 22 lakhs on Arun Chemicals 4. Further by the impugned order duty of Central Excise of respective amount has been confirmed for unaccounted manufacturing and clandestine removal of RBA in the guise of soda bicarbonate (Soda bi carb) under Rule 9(2) of CER read with Section 11A of the Central Excise Act. The said confirmed duty is given below: (a) Duty of ₹ 29 .....

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S. (Jagjot Singh) Jain; b) Penalty of ₹ 10 lakhs imposed on Shri Amar Kumar Jain; c) Penalty of ₹ 2,50,000/- on M/s Amar Enterprises d) Penalty of ₹ 1,50,000/- M/s India Rubber & Chemicals; e) Penalty of 60,000/- on M/s Ceyenar Chemicals; f) Penalty of ₹ 85,000/- on M/s Lutus Chemicals; 5. The period involved in this case is 1989-90 to 1990-93 and show cause notice is dated 16.3.94. 6. These eight appellants have been represented by the ld. Advocate Shri Rahul Tangri, .....

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e others as dummies. In such a situation the demand on account of clubbing of clearances is not sustainable in view of the judgment of the Hon ble Supreme Court in the case of Gajanan Fabrics Distributors Vs CCE - 1997 (92) ELT 451 (SC). (b) The appellants further rely on the Circular No. 6/92 dated 29.5.1992 where in the context of Notification No. 175/86-CE dated 1.3.1986 it has been clarified that different firms are treatable as separate manufacturers and each eligible for exemption. (c) Thi .....

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ectricals (P) Ltd. Vs. CCE, 2004 (65) RLT 481 ; Premium Moulding & Pressing Vs. CCE, 2004 (65) RLT 143; Bright Gems Company Vs. CCE, 2004 (65) RLT 186 (e) In view of the above decisions and the circular and taking into account the facts and circumstances in the present case it is submitted that the impugned order of the Commissioner clubbing the clearances and thereafter confirming the duty demand against all the units separately is not sustainable and liable to be set aside. 6.2 Appellants .....

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drawn from the other two manufacturing units. (b) The Commissioner at para 108 of the impugned order has relied on the report of the Sales Tax authorities and categorically held Arun Chemicals had no facility or capacity to manufacture RBA. He has further held at para 111 that Arun Chemicals did not manufacture RBA, which in fact was manufactured by Atlantic Chemicals. This finding given by the Commissioner clearly shows that Arun Chemicals did not have any facility to manufacture RBA and was me .....

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A assumed to have been manufactured has been determined based on the test report of the sample drawn. (d) It is submitted by the ld. Counsel for the appellant that Arun Chemicals admittedly did not have any facility to manufacture as is evident from paras 108 and 111 of the impugned order. Further, there is no specific finding given in the entire order as to how the demand of ₹ 22,51,582 is to be confirmed against Arun Chemicals. Only at para 152 the duty demand confirmed has been indicate .....

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RBA. There is also no evidence of the flow back of the money consideration for the quantity of RBA alleged to have been clandestinely removed. Thus, the demand of ₹ 22,51,582 confirmed by the Commissioner in the impugned order is unsustainable and liable to be set aside. 6.3 Appellants main pleadings on demand of ₹ 35,08,005 against Atlantic Chemicals on the basis of test report : a) The Commissioner has also confirmed an amount of ₹ 35,08,005/- on Atlantic Chemical Industries .....

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mple of the RBA and sent it to CRCL for testing. The test report dated 20.4.1993 indicated that the sample composed of hexamine and sodium bicarbonate and the percentage of sodium bicarbonate was 51.1%. The test report was challenged by the appellants since the beginning and had sought cross examination of the Chief Chemist. c) The demand has been raised on the basis that the appellants had added 1200 kgs of sodium bicarbonate to the pure rubber blowing agent (DNPT) and obtained 2350 kgs of the .....

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Commissioner on the ground that the said cross examination which was made after a lapse of 10 years cannot be preferred since the Test Report which was given immediately after the trial of the sample clearly indicated the contents of the products and that the appellants had not challenged the same. e) The appellants have always sold RBA with the minimum quantity of pure blowing agent ranging from 60-80%. The price of the RBA accordingly varies based on the content of pure blowing agent. The dema .....

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er by the department to show that the appellants had used only 48.9% of the pure blowing agent in the final product during the entire period of dispute . On the basis of the test report of one sample the department has worked out that the demand for the total period of 5 years from 1989-90 onwards which is not permissible. 6.4 Appellants main pleadings on demand on the ground of removal of RBA in the guise of sodium bicarbonate : a) The Commissioner confirmed a duty amount of ₹ 6,87,381 on .....

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coercion. These persons also admitted that it is technically possible to use sodium bicarbonate as such for the manufacture of rubber sheets. b) The demand relates to the quantity of sodium bicarbonate traded by Arun Chemicals and Amar Enterprises. The entire quantity was purchased from the authorized distributors of Tata Chemicals and traded as such. There is no evidence whatever, to show that the entire quantity of sodium bicarbonate was converted into RBA and sold. Further, there is no evide .....

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have been cleared. There is also no evidence of the flow back of the money consideration for the quantity of RBA alleged to have been clandestinely removed. Hence, the demand of ₹ 6,87,381 and ₹ 29,42,754 confirmed on the ground of clearance of RBA in the guise of sodium bicarbonate is unsustainable and liable to be set aside. 6.5 Appellants main pleadings on demands are time barred : a) The demands are time barred. The demand confirmed by the Commissioner relates to the period of 1 .....

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of other units being run by the members of the same family. In regard to the confirmation of the duty demand on the alleged clandestine removal of the goods, demand has been confirmed on the ground that the appellants had suppressed the ratio of Sodium Bicarbonate consumed in the final product which resulted in suppression of production which has been clandestinely removed b) The appellants had set up their unit in 1984/1988 and since then were manufacturing RBA under the brand name Foamtax and .....

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or the benefit of SSI exemption. c) The existence of all the units and the fact of all the family members running of the units was also known to the departmental authorities in view of the various declarations filed from time to time. The appellants submit that the departmental authorities could have verified the actual position and the eligibility of the SSI notification to each of the units on receipt of such declarations from the appellants. The Department having not conducted any enquiry as .....

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e clearances of excisable goods made by M/s Atlantic Chemicals, M/s Foamsil Chemicals, and M/s Arun Chemicals. (b) Shri Praveen Kumar Jain, proprietor of M/s Atlantic Chemicals and Shri Naveen Kumar Jain, Proprietor of Foamsil Chemecals are son of Shri Jagjot Singh Jain ( Shri J. S. Jain) r/o E-10, Preet Vihar, Delhi. Further, Mrs. Babita jain, proprietress of M/s Arun Chemicals is the wife of above said Shri Naveen Kumar Jain. All of them are living together. Further, M/s Amar Enterprises is a .....

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e.(Para 92 of OIO). (d) Shri R. N. Mittal was doing taxation work of M/s Amar Enterprises, M/s Atlantic Chemicals, M/s Foamsil Chemicals, M/s Arun chemicals and M/s Arvind Rubber Mills, under the direction of Shri J. S. Jain and his elder son Shri Amar Kumar Jain, though he was an employee of M/s Amar Enterprises only. All these firms were operating from registered address of M/s Atlantic Chemicals. (Para 93, Para 96 and para 97 of OIO). (e) M/s Foamsil Chemicals was using water, electricity and .....

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d by three members of one family, engaged in the manufacture of common single goods namely RBA and having common brand names, foamsil , foamtax 7.2. Revenue s submissions on procurement of raw material and disposal of finished excisable goods members of one family played active and decisive role : a) M/s Arvind Rubber Mills (owned by Father Shri J. S. Jain and another brother Shri Amar Kumar Jain) and M/s Amar Enterprises (owned by mother Ms. Kiran Mala Jain) played active role in disposal of th .....

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s/firms was not available.(Para 124 of OIO. d) The list of firms floated by Shri J. S. Jain in the name of his family members is detailed below: M/s Atlantic Chemicals, under the proprietorship of his son Shri Praveen Kumar Jain. M/s Foamsil Chemicals, under the proprietorship of his another son Shri Naveen Kumar Jain. M/s Arun Chemicals (India) under proprietorship of his daughter in law Smt. Babita jain w/o Shri Naveen Kumar Jain. M/s Arvind Rubber Mills Pvt. Ltd., manufacturer of Aluminum Sil .....

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llant can take shelter under para 3 and 4 of the exemption Notification: Not admitted on following grounds : (a) The brand name Foamtax , Foamsil , Lotus and Blow Foam being used by Shri Praveen Kumar Jain, Proprietor of M/s Atlantic Chemicals without paying any royalty for such brand names, belong to his brother Shri Amar Kuamr Jain.(Para 113 and Para 114 of the impugned order (OIO). (b) Further, for trademark Foamsil and Foamtax being used by M/s Atlantic Chemical, Shri Amar Kuamr Jain was not .....

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not eligible for SSI exemption under Notification No. 175/86-CE dated 01.03.1986, for the brands owned by him.(Para 120 of OIO). (e) M/s Arun Chemicals was not registered with the directorate of Industries or the Development Commissioner(SSI Industries). It is un- disputed fact that this firm had cleared RBA without payment of Central Excise duty availing exemption. Thus, there is a clear contravention of Para 3 and Para 4 of Notification No. 175/86-CE dated 01.03.1986. (Para 112 of OIO). 8. We .....

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ls 30,60,323/- (121360+2251582+687331) 29,20,000 (120000+2200000+600000) 4. Shri J.S. Jain - 25,00,000/- 5. Shri Amar Kumar Jain - 10,00,000/- 6. Amar Enterprises - 2,50,000/- 7. India Rubber & Chemicals - 1,50,000/- 8. Ceyenare Chemicals - 60,000/- 9. M/s Lotus Chemicals - 85,000/- 10. The impugned matter is being considered in four parts, which are mentioned in brief below. 10.1 The 1st part relates to clubbing of manufacturing and clearances of three units during 1989-90 to 1993-94 by ava .....

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cals on account of unaccounted manufacturing of RBA, which was cleared clandestinely in the guise of soda bi carb. 10.3 The 3rd part of the impugned matter relates to confirmation of duty of Central Excise and imposition of penalties on account of unaccounted manufacturing of RBA and clearance thereof without payment of duty of Central Excise by declaring wrong formula of manufacture of RBA against (i) ) M/s Atlantic Chemicals (ii) M/s Foamsil Chemicals and (iii) M/s Arun Chemicals. 10.4 The 4th .....

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/86-CE & 1/93-CE:- 11.1.1 In respect of this issue, the Commissioner (Adjudication) in the impugned order inter alia observes as under: 96. It is observed that all the firms, namely, (i) ) M/s Atlantic Chemicals (ii) M/s Foamsil Chemicals and (iii) M/s Arun Chemicals (iv) Amar Enterprises and (v) Arvind Rubber Mills were operating from A 1/11-B, Pahwa Mansion, Asaf Ali Road, New Delhi (hereinafter referred as Pahwa Mansion Office) which was declared registered office of Atlantic Chemicals. S .....

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for the year 1992-93 recovered from their Pahwa Mansion Office, contained several letters addressed by different customers to Foamsil Chemicals in which the address of Foamsil Chemicals is of their Pahwa Mansion office. SCN fists out names of a few of the firms who had mailed their letters on the said address for Foamsil Chemicals, also recovered file containing vouchers in course of the search of the office premises on 20.4.93 which pertained to Arun Chemicals and which showed the Pahwa Mansion .....

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he records were kept together and there was no segregation of records pertaining to different units. From the records, it appears that SCN states that records of all the units i.e. Atlantic Chemicals, Amar Enterprises and Arvind Rubber Mills as well as that of Arun Chemicals and Foamsil Chemicals were recovered from the same premises. Further, a cheque book of Foamsil Chemicals signed by Shri Naveen Kumar was also found in the in the Almirah kept in Shri J.S. Jain s room. Besides above, a file c .....

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nstitute evidence that Shri J.S. Jain was owner of Arun Chemicals and Foamsil Chemicals. It is observed that in the reply dated 9.1.95 of Atlantic Chemicals was admitted that Shri J.S.Jain, being MD of Arvind Rubber Mills remained stationed at this office premises and being the head of the family, he was respected by the customers who used to place orders with him which he passed on to the respective companies who executed the orders. Further, it was also stated that J.S. Jain being head of the .....

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financial accounts of Atlantic Chemicals and Foamsil Chemicals which indicate that the said firms also had a common financial management. These cases include transactions under which money was transferred through cheque by Foamsil Chemicals to Atlantic Chemicals ; payment made to UPSEB on behalf of one another etc. However, no records was found indicating payment of interest by Atlantic Chemicals to Foamsil Chemicals or Arun Chemicals for keeping and utilizing their amounts in their business. Si .....

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s of one unit by other without payment of interest is not denied by the noticees. 124. In this case, there are certain outstanding facts. The 3 units , all proprietary concerns, are owned by three members of one family i.e. Sh. Parveen Kumar Jain (brother, Sh. Naveen Kumar Jain (brother) and Ms. Babita Jain (wife of Shri Naveen Kumar Jain). The goods manufactured are the same, that is RBA. There is use of one common brand names, i.e. Foamsil and foamtax which are owned by Shri Amar Kumar Jain wh .....

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to play active and decisive role. Apart from claimed manufacture and sale of goods from these units Arvind Rubber Mills (owned by father Shri J.S. Jain and another brother Shri Amar Kumar Jain) and Amar Enterprises (owned by mother Ms. Kiran Bala Jain) play active role in the disposal of the goods manufactured by the three units. These units, that is, Atlantic Chemicals, Foamsil Chemicals and Arun Chemicals were situated in a piece lf land purchased from the brother of Shri J. S. Jain at a nomin .....

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sistency regarding precise period of Arun Chemicals being in operation refer para 110 supra). There was no distinction in the management of the firms and these firms were artificially fragmented only for the sake of availing exemption under the Notification No.175/86-CE (later 1/93-CE). Thus, the clearances of all the units were required to be clubbed for computing the value of clearances for the applicability of Notification No.175/86 CE (later 1/93 CE).When this is done, the value of clearance .....

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ppropriate duty amounting to ₹ 38,45,363.59 and ₹ 31,39,143.16 respectively during the period from 1989-90 to 1993-94.Simiarly, Arun Chemicals are also held to have manufactured and cleared RBA without payment of duty amounting toRs.1,21,360/- in violation of Rule 9(1), 173B, 173G of the CER. As this short/non-payment of duty was done by suppression of facts, such as, not disclosing true nature of the ownership, control and management of firms and their activities, misdeclaration of .....

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ade by the respective noticees/appellants - M/s Atlantic Chemical Industries, M/s Foamsil Chemicals (not appellant here) and M/s Arun Chemicals for the item namely RBA availing the benefit of Notification No.175/86-CE (1/93-CE later) have to be clubbed together as we hold that these units are one and the same, when their operations are under common management and financial control and have mutuality of financial interest with each other. When it is so, then we agree with the findings of the impu .....

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sely controlled by only one person Shri J.S. Jain, who is one of the appellants here. The facts and circumstances have warranted to examine the reality of these units; and after going behind the mask of these entities, it has been revealed that activities of these units i.e. manufacture, clearance etc. has to be clubbed together. In this regard, we take support from the Honble Supreme Court s observations in the above case of Calcutta Chromotype Ltd. (supra) which are given below: 14. In M/s. M .....

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tax planning may be legitimate provided it is within the framework of law. Colourable devices, however, cannot be part of tax planning. Dubious methods resorting to artifice or subterfuge to avoid payment of taxes on what really is income can today no longer be applauded and legitimised as a splendid work by a wise man but has to be condemned and punished with severest of penalties…... (emphasis supplied) 11.1.5 We do not agree with the appellants contentions that impugned order has fixe .....

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on of the impugned order that these three firms are one and the same; their clearances are to be clubbed, as discussed earlier. Regarding the submission that M/s Arun Chemicals had got no manufacturing activity, it may be mentioned that both M/s Foamsil Chemicals and M/s Arun Chemicals have been actively involved in the operations of wrongly availing exemption under Notification No.175/86-CE by -artificial fragmentation when there was no distinction in management of the firms . Therefore, M/s Ar .....

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after clubbing of clearances of the subject three units, liabilities for payment of duty of Central Excise is hereby fixed on M/s Atlantic Chemicals. Consequently, the appellant M/s Atlantic Chemicals is to pay total duty of Central Excise of ₹ 71,06,066/- (i.e. ₹ 38,45,363/- + ₹ 31,39,343/- + ₹ 1,21,360/-) for the RBA manufactured and cleared during 1989-90 to 1993-94. In this regard, corresponding penalty of ₹ 70,20,000/- is also imposed on M/s Atlantic Chemicals .....

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and removed clandestinely in the guise of soda bicarbonate. 11.2.1 After hearing interested parties and on careful examination of all the facts on records, it appears that the appellants have unsuccessfully tried to convince that they did not unaccountedly manufacture and clandestinely remove RBA in the guise of soda bicarbonate. In this regard, there are clear facts on record mentioned in the show cause notice as well as in the Order-in-Original issued by the Commissioner (Adjudication). It ha .....

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ts that they sold/ sent soda bi carb and not the RBA. The appellants have also argued that a few of the statements were later on retracted or modified. However, we are of the considered view that those retractions and modifications do not matter when overall evidences conclusively prove that appellants in fact cleared their product RBA in the guise of soda bi carb thus evading central excise duty. It has also come on record that soda bi carbonate cannot be technically used by the manufacturers c .....

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bserved as under: 145. It is observed that as per the SCN, Soda bi carb was freely available in Kerala during the material period at the rates prevailing in Meerut/ Delhi, that is, between PMT ₹ 5984/- PMT in 1989-90 to ₹ 7515 PMT in 1992-93. The price of such goods, when transported from Delhi to Kerala (Cochin) was costlier by ₹ 1529 PMT on account freight charges. This addition cost would further go up if the forwarding, loading and unloading charges were also added in it. T .....

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Rubber & Chemicals, Ceyenar Chemicals and Lotus Chemicals. 146. From the discussion in the foregoing paras it is evident that Soda bi Carb was supplied by Laxmi Commercial Corpn. In bags of 50 bags of 50 kgs. Each as received from Tata Chemicals. The delivery of Soda bi Carb was taken by representatives of Atlantic Chemicals from Laxmi Commercial Corpn. The over-writing on bills/ invoices issued by Laxmi Commercial Corpn. in the weight of the packages was done from 50 kgs. To 25 kgs. The bil .....

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was no necessity for incurring expenditure and wasting labour on repacking of 50 kgs. Bags to 25 kgs. It is also evident that Atlantic Chemicals were arranging collection of Soda bi Carb billed to India Rubber & Chemicals from the godown of Laxmi Commercial Corp. and were taking the same to their factory situated at Dundahera and in its place they dispatched the consignments of RBA manufactured in their factory without payment of duty. They also dispatched RBA from their factory and the bil .....

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respectively (ref. paras 2.3, 3, 5 and 7 of SCN) in contravention of the provisions of Rule 9(1), 52A, 53, 173B, 173F, 173G and 226 of the CER. As the said duty had not been levied / paid by them due to the fraud, willful mis-statement, suppression of facts and in contravention of the provisions of the CER with intent to evade payment of duty, it is held recoverable for extended period under proviso to Section 11A(1) of the Act and Rule 9(2) of the CER. For the said violations they are also hel .....

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ing paras, it is evident that Ceyenar Chemicals, Inda Rubber & Chemicals and Lotus Chemicals had sold the said goods to various hawai rubber sheets manufacturers and also collected the differential amount between the price of such supplied RBA and price of Soda bi Carb and arranged then remittance to Atlantic Chemicals and Sh. J.S. Jain. In their defence submissions dated 9.1.95, India Rubber & Chemicals, Ceyenar Chemicals & Lotus Chemicals have denied the allegations and contested t .....

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the impugned order on the issue of manufacture and clearance of RBA in the guise of soda bi carb. However, as it is on record that M/s Arun Chemicals did not have required manufacturing facility (though they were actively involved in the clearance of RBA in the garb of soda bi carb) the demand of Central Excise duty of ₹ 29,42,754/- and ₹ 6,87,381/- confirmed against M/s Atlantic Chemicals and M/s Arun Chemicals by the impugned order is hereby confirmed against M/s Atlantic Chemical .....

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ees thirty five lakhs only) on M/s Atlantic Chemicals only in this regard under Rule 9(2) and Rule 173Q of the Central Excise Rules. Further, it is to be noted that M/s Arun Chemicals along with M/s Atlantic Chemicals and others has been actively involved in the clearance of RBA in the guise of soda bi carb and therefore, deserve imposition of penalties. Consequently, penalty of ₹ 6 lakhs imposed on M/s Arun Chemicals by the impugned order under Rule 9(2) and Rule 173Q of Central Excise Ru .....

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ants deny this charge of extra production, which is based on test reports of the product. As a proof of extra production, the Department has got only the test reports, which respective assessee-appellants are contesting. We find that the Department does not have any other evidence other than the test report in order to prove its case of extra production of RBA. One of the appellants M/s Arun Chemicals argues that no sample was drawn from them; therefore, no liability of Central Excise duty can b .....

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re cannot be any production of RBA on record by them. Moreover, unless there are sufficient corroboratory evidences on records to support this charge of extra production of RBA (based on the test reports), we are of the considered view that there would be no sufficient justification to sustain the charge of extra-production of RBA (based on mere test reports), where the Revenue claims that central excise duty was not paid by the respective noticees/appellants. In other words, when we do not find .....

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