TMI Blog2017 (4) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... rate registrations not only for Central Excise but also for Sales Tax and other government departments. Under the circumstances, DMGP as well as DDIL are to be considered as separate manufacturing premises and each one will be eligible for the benefit of SSI exemption under N/N. 8/2003-CE dated 01.3.2003. Brand Names of DMGP and DDIL - Held that: - the two brand names are not identical and are being applied on different products manufactured by DMGP and DDIL. There is also nothing on record to suggest that there is any dispute regarding use of brand names. Consequently, the brand names are different and separate for the two units. Whether DMGP and DDIL are “interconnected undertakings”? - Held that: - it is evident that all the three entities are to be considered as interconnected undertakings. Once these three are considered as interconnected undertakings then the valuation of goods manufactured by DMGP and / or DDIL and sold exclusively through DDSC, cannot follow transaction value, it will be necessary to take recourse to Central Excise Valuation Rules. It is found that entire goods manufactured by DMGP as well as DDIL are sold only through DDSC after which the goods are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch DDIL had no independent existence, that they are interconnected units and their combined turnover is higher than the exemption limit for SSI exemption under Notification No. 8/2003 dated 1.3.2003. On this basis, a show cause notice dated 31.3.08 was issued to DMGP, DDIL, DDSC, Shri Sanjay Gambhir and Shri Rajeev Gambhir for:- (a) clubbing the clearance of DMGP with DDIL and for determining their liability for SSI exemption and on this basis, recovery of Central Excise duty amounting to ₹ 27,40,247/- from DMGP under proviso to Section 11A(1) of Central Excise Act along with interest under section 11AB; (b) imposition of penalty on DMGP under section 11AC of Central Excise Act, 1944; and (c) Imposition of penalty on DDIL, DSSC, Shri Sanjay Gambhir and Shri Rajeev Gambhir under Rule 26 of Central Excise Rules 2002. 2.1 The Show cause notice was adjudicated by the Joint Commissioner vide order in original No. 52/08-09 dated 05.2.2009 by which (a) duty demand of ₹ 27,40,247/- was confirmed against DMGP under proviso to section 11A(1);; (b) penalty of equal amount was imposed on DMGP under section 11AC of Central Excise Act; and (c) penalty of Rs. Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freight cartage, advertisement, sales promotion etc. in respect of the goods manufactured by DMGP and DDIL; that Shri Anil Kumar, CEO of DDSC in his statement dated 23.11.06 has categorically stated that DDSC was a marketing firm and DDSC had purchased its goods for marketing from DDIL and DMGP and had never purchased any goods from any other company and that all the three units were being controlled by members of the same family and there was huge difference between the prices at which the goods were being sold by DMGP to DDIL and that at which the goods were being finally sold by DDSC. He, therefore, pleaded that the impugned order may be upheld. 6. We have carefully considered the submissions of both sides and perused the records. The members of Gambhir family have over 90% share holdings in both DMGP and DDIL and as partners of DDSC control the DDSC. Though DMGP and DDIL were using different brand names, logo being used by DMGP consists of word DM , and the logo of DDIL is DD . The Commissioner (Appeals) observed that the logos are printed in almost identical manner and similarly inscribed in a circle placed in a rectangular space with the same dimensions and as such, prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on different products manufactured by DMGP and DDIL. There is also nothing on record to suggest that there is any dispute regarding use of brand names. Consequently we take the view that the brand names are different and separate for the two units. 9. Next, we turn to the question, whether DMGP and DDIL are interconnected undertakings . The concept of interconnected undertaking have been borrowed from Monopolies and Restrictive Trade Practices Act, 1969 into Section 4 (2)(b) of the Central Excise Act, 1944. The concept of interconnected undertaking is applicable for determination of value in terms of Section 4 of the Central Excise Act for the purpose of charging excise duty of goods on which the duty is chargeable ad-valorem. 10. We find that members of the Gambhir family have over 90% share holdings in both DMGP and DDIL and as partners of DDSC also control that company. From the various items covered under the definition of interconnected undertakings, it is evident that all the three entities are to be considered as interconnected undertakings. Once these three are considered as interconnected undertakings then the valuation of goods manufactured by DMGP and / or DDIL ..... X X X X Extracts X X X X X X X X Extracts X X X X
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