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2016 (11) TMI 12 - CESTAT NEW DELHI

2016 (11) TMI 12 - CESTAT NEW DELHI - TMI - SSI Exemption - dummy units - clubbing of turnover of two units - Clandestine removal of goods - Held that: - turnover cannot be clubbed together and the two units cannot be treated as one unit merely because various factors such as related partners, common use of machines, labour , employees etc. unless there is a clear and specific evidence that there is mutuality of business interest between the two units and that both have interest in the business .....

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ducted by the Central Excise officers and were also found engaged in the manufacture of excisable goods as per panchnamas dated 17.11.2005 drawn on the spot. From the above facts stated, it is amply clear that both the firms were engaged in the manufacture of excisable goods namely plastic extrusion machines with the help of various machines installed in their respective premises and workers employed. - I find that the most important aspect about having common funding and financial flow back .....

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0-2016 - Dr. Satish Chandra, President And Mr. B. Ravichandran, Technical Member Shri G.R. Singh, A.R. for the appellant/Revenue Ms. Rinky Arora, Advocate for the respondent ORDER B. Ravichandran These two appeals are by the Department against the order dated 8.4.2009 of Commissioner (Appeals), Delhi I. The respondents are M/s Shiv Mechanical Works and Shri Manjeet Singh, proprietor of M/s Manjeet Engineers. Based on some information that the main respondents are not discharging central excise d .....

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nufactured and cleared by them during year 2002-03 to 2003-04. The main allegation in the proceedings was that the clearance from the factories of M/s Shiv Mechanical Works and M/s Manjeet Engineers should be treated together as clearance from and on behalf of M/s Shiv Mechanical Works. M/s Shiv Mechanical Works are to be considered as real manufacturer of excisable goods and as such, all the turnover by combining sales as shown by M/s Manjeet Engineers should be taken to assess exemption. Duty .....

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hat Shri Gian Singh, proprietor of the main respondent categorically stated that total excisable goods cleared and manufactured in the factory was ₹ 1.12 crores, ₹ 1.28 crore for the period 2002-03 and 2003-04 respectively. An amount of ₹ 8,00,000/- has been debited by him. It was admitted by them that some machines were installed by Manjeet Engineering Firm owned by his son. In reality, the entire work relating to designing of all the extruders and barrels cutting/boring, for .....

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appellate authority has erroneously set aside the original order. 3. We have perused the appeal records and grounds of appeal carefully. Admittedly, the whole case of the Department depends on the statement of Shri Gian Singh who indicated that clearance from M/s Shiv Mechanical Works was to the tune of ₹ 1.2 crores and ₹ 1.28 crores (approx.) during the period in question. These amounts were added to the real turnover as shown in the records and duty has been demanded. No efforts w .....

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said assertion, we note that Shri Gian Singh gave some rough estimate of turnover. At best, it can be starting point of investigation to establish corroborative evidence. Now, to work out the duty demand, approximate figures of turnover is not legally sustainable. 5. Para 4.10 of the original order indicates how duty liability was worked out when Shri Gian Singh purportedly admitted the turnover to be approximately ₹ 1.12 crores / ₹ 1.28 crores. The said amount has been added to the .....

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the units. He has recorded the following findings I find that similar observations have been made by various Hon ble Tribunals by following the judgments of the Hon ble Apex Court and it has been held that units cannot be clubbed together and the two units cannot be treated as one unit merely because various factors such as related partners, common use of machines, labour , employees etc. unless there is a clear and specific evidence that there is mutuality of business interest between the two .....

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nd having independent manufacturing premises/factories during the search operations conducted by the Central Excise officers and were also found engaged in the manufacture of excisable goods as per panchnamas dated 17.11.2005 drawn on the spot. From the above facts stated, it is amply clear that both the firms were engaged in the manufacture of excisable goods namely plastic extrusion machines with the help of various machines installed in their respective premises and workers employed which is .....

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ting authority and this appellate authority indicate that both the units were incorporated during different periods i.e. in 1986 nd 2001, are situated geographically apart having separate addresses , separate land and building, have independent funding and financial arrangements from various independent sources, independent loans from various banks, separate machinery, labourers, employees, purchase of raw material and sale of goods, separate licences from various statutory authorities and have .....

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ration has been got done on job work basis.The essential factor is the financial flow back and mutuality of interest for clubbing the clearances of the two units which is absent in the instant case as no evidence of flow back of sales proceeds and financial funding of any kind to each other unit have been placed on record. It is not the case of the department either that any of the firm have funded other firm in any .The above facts and circumstances no where even suggest that any of the two fir .....

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