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Sri Sowdeswari Industries, Kayathri Exports Versus Commissioner of Central Excise, Coimbatore

SSI exemption - dummy unit - clubbing of clearances - Held that: - The case establishes that M/s.KE was a bubble. That was used as a conduit of M/s.SI to divide clearances to claim SSI benefit by both falsely. M/s.KE was neither a distinct entity nor engaged in manufacturing activity nor also cleared any excisable goods. False records of M/s.KE were maintained in the premises of M/s.SI as is revealed from para-2 of the SCN. Only spurious transactions were recorded in the name of M/s.KE in its re .....

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ority finds such grant has caused prejudice to Revenue, appropriate measure may be taken. - The whole case of M/s.KE was based on the falsehood which was well known to the owners and Power of Attorney holder of both the units. Such act of sabotage to Revenue calls for dismissal of both the appeals - decided against assessee. - Appeal No.E/92/2006, Appeal No. E/469/2006 - FINAL ORDER No.42288-42289/2016 - Dated:- 17-11-2016 - Shri D.N. Panda, Judicial Member And Shri Madhu Mohan Damodhar, Tec .....

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l filed by appellant. 2. Ld. D.R read out the show cause notice dt. 7.9.98 to bring out the pertinent fact that M/s.Kayathri Exports (in short, M/s.KE) although having a postal address, was benamidar for M/s.Sri Sowdeswari Industries (in short, M/s.SI) and given shelter to M/s.SI for clearance in the name of the former so as to avail SSI benefit by both the units dividing the clearances of M/s.SI. Such factual aspect is vividly clear when Annexure-I to the show cause notice is read. Investigatio .....

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M/s.SI. Also they found records of M/s.KE in the premises of M/s.SI. The incriminating documents recovered revealed that certain invoices showing purchase of raw materials in the name of M/s.KE were available in the premises of M/s.SI without any manufacture being carried out in the premises of M/s.KE. 4. Statements recorded from one Smt.P.Shanthi and Smt.P.Lalithamani, who were connected with the affairs of M/s.KE, revealed that actually there was no manufacturing operation carried out in the .....

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fit creating documents as if manufacture was carried out in the premises of M/s.KE. Even evidence recovered from M/s.SI revealed the same story as stated above. M/s.SI agreed to work out the liability of both the industries and discharged the same. 5. Revenue says that on the above circumstance, duty demand was confirmed by the adjudicating authority as well as the appellate authority on both M/s.KE and M/s.SI. So far as M/s. SI is concerned, the appellate authority although confirmed the duty d .....

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y, penalty of ₹ 2,67,977/- imposed by adjudicating authority was confirmed against M/s.KE. On the above circumstances, Revenue's prayer is to dismiss both the appeals. 7. Heard both sides and perused the record. 8.1 The investigation result as is revealed from paras-1 to 13 of the Annexure-I to the SCN dt. 7.9.98 brings out questionable modus operandi of the family of Sri Venkatesan owning M/s.KE and M/s.SI. There appears pre-meditated design of the family who scientifically engineered .....

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