TMI Blog2017 (4) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied the conditions as reproduced herein above in para 137 of the adjudication order. Reliance placed in the case of Commissioner of Central Excise v. Sotex [2006 (11) TMI 39 - SUPREME COURT OF INDIA]. Benefit allowed - appeal dismissed - decided against Revenue. - E/2485-2488/2011 and E/747, 748, 746, 343/2012 - A/52641-52648/2017-EX[DB] - Dated:- 29-3-2017 - Mr. M.V. Ravindran, Member (Judicial) And Mr. V. Padmanabhan, Member (Judicial) Shri R.K. Manjhi, AR for Revenue Shri K.K. Anand, Advocate for respondent ORDER Per M. V. Ravindran All these appeals are filed by Revenue against order-in- original No.04-07/COMMR/IND/Ind/2011 dated 31.03.2011. 2. The relevant facts that arise for consideration are respondent No.1, 2, 4 and 5 are engaged in the manufacture of Corrugated Box falling under Central Excise chapter heading 4819 and the goods were exempted till 01.03.2003. Respondent No. 3 is a trader and respondents 6, 7 and 8 are individuals. A search was carried out in the factory and the residential premises of the respondents and documents were retrieved. On going through the documents, Revenue authorities came to a conclusion that the clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than the one from which they were drawing their remuneration. (d) Loan against property of Shri Ramesh Saboo and huge personal loans from the proprietor of respondent No.1 formed the main corpus fund for all the respondent-units. There was free flow of money between the respondent units in the form of advance payments, free raw material and facility of delayed payment against purchases or job work done. (e) The basic infrastructure for manufacture of corrugated boxes was available only with respondent No.1 and other respondents were getting the work done from the respondent No.1. (f) Accounts of all 4 respondent units were prepared/maintained centrally in the computer of respondent No.1 which indicates that respondent No.1 had interest in all the respondent-units and maintain a tight vigil on the turnover of each manufacturing unit. (g) Shri Ramesh Saboo is the head of the Saboo family and mentor behind creation and managing the business of respondent-units like family business providing financial help, providing orders and providing raw material and even extending manufacturing facility available at respondent No.1 s premises. 3.1 It is his further submission as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by any additional evidences or contrary evidences; all the manufacturing units are owned by different persons and had come into existence at different points of time and were started by the respondents from their own funds; this evidence on record has not been rebutted by Revenue; that all the respondents are independent unit and entitled for the benefit of SSI exemption under notification No.8/2003-CE and there is nothing on record to show that all the manufacturing units were owned or belongs to respondent No.1; that the value of 4 manufacturing units cannot be clubbed and duty be demanded from respondent No.1 unless it is proved that all the 3 units were dummies of respondent No.1 which in the case in hand is incorrect as there is an instance that all the units were having manufacturing premises; that the show-cause notice absolutely adduced no evidence to show that Shri Ramesh Saboo (Proprietor of respondent No.1) had created all other three manufacturing units on paper while it is on record that other 3 units were independent on their own source of funds and different bank accounts; that the allegations of frequent financial transactions between respondent units is also inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority was correct in dropping the proceedings initiated by the show-cause notice for clubbing of clearances of respondent No.1 and respondents 2, 4 and 5 and demanding Central Excise duty and also for imposing penalties on other respondents. 5.1 We perused the show-cause notice issued by the authorities and we find that the allegations in the show-cause notice mainly as the ground that all the units were managed, controlled by members of Saboo family; that from the financial transactions there was free flow of the funds among the respondents, 1, 2, 4 and 5 and pattern of working of all the respondents 1,2, 4 and 5 were managed and controlled by members of Saboo family and with any stretch of imagination, the units of the notice No.1, 2, 4 and 5 cannot be treated as independent units and therefore clearance of all these units needs to be clubbed after denying exemption under Notification No.8/2003-CE, duty liability needs to be fixed on respondent No.1. The said show-cause notice also seeks explanation from respondent No.3, 6, 7 and 8 why penalty should not be imposed on them and from respondent 1, 2, 4 and 5 demanding Central Excise duty. 5.2 We find that the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other unit and there is no documentary evidence on record; on the contrary the show- cause notice and panchnamas drawn on 18.01.2008 (on the date of visit by the officers) found that each of the unit was manufacturing their own goods in their own premises with the help of their own resources. We find that these findings based on the facts as recorded by the adjudicating authority are not contraverted by the Revenue in the grounds of appeal. (e) The adjudicating authority has correctly come to a conclusion that proposal for clubbing of clearances is erroneous and without any authority of law and we concur with the same. Our views are fortified by the decision of Balsara Hygiene Products (supra) which has been upheld by the Apex Court as cited herein above. (f) The adjudicating authority has in the impugned order dealt with the allegations as to why the benefit of notification 8/2003 should not be denied to the respondent No. 1, 2, 4 and 5 individually. The finding of the adjudicating authority in this context is from paragraphs 124 onwards to 150. We find that the adjudicating authority has held the benefit of Notification No. 8/2003 is available to all the respondent 1, 2, 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their clearances have not been fulfilled in this case. In the result, the demand of duty and the penalty on the notice is not sustainable. It has been held in a number of decisions that clubbing of production of two units can be done only if one of the units is a dummy of another. It is not in the instant case. 147. The show-cause notice have not denied that the units are having separate machineries, separate income-tax PAN No., separate sales tax, separate professional tax registration, separate workers/staff and separate electricity meters. It is also seen from the panchanama itself that there were separate machinery installed in the factory premises of all the notice and manufacturing activity was going on separately. It is well settled law that the clubbing of clearances, when the two units can establish their independent entity, is not called for. There is nothing on record to show that all the units were not independent and thus not entitled individually to the benefit of Notification No.8/98. 5.2 The above said factual findings of the adjudicating authority have not been controverted by Revenue in their appeal by way of any contrary evidence and also indicates that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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