TMI Blog2017 (10) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... all the units are located in Plot No. 40 but Plot No. 40 is having different shades and the units were located in different sheds. Therefore, it cannot be said that all the units are located in a same building. Moreover, they are having different entry gates for them. It is fact that in all the units, Shri Atul Gulati is a common person who is managing affairs of all the three units but same cannot be taken a ground for clubbing the clearances of all units, in the light of decision in the case of Renu Tandon vs. UOI [1992 (1) TMI 126 - HIGH COURT OF JUDICATURE FOR RAJASTHAN], where it was held that Mere blood relationship or sharing of staff, some temporary common employment, similarity of product is also not sufficient to draw an inference that the two units should be clubbed together. All the three units have been registered separately after completing investigation. In that circumstance, the clearances made by three units cannot be clubbed in the light of the decision in the case of Plasto Containers (India) Pvt. Limited vs. CCE, Nagpur [2011 (1) TMI 806 - CESTAT, MUMBAI], where it was held that as both the units are having separate directors, separately registered with Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and surrendered their registration in the year 2002. M/s. Anurag Dyes and Chemicals Pvt. Limited having Shri Atul Gulati, Shri B.R. Duggal and Shri Arjun Bisht as Directors. M/s. Sterlite Chemicals Pvt. Limited (M/s. SCPL for short) having two Directors Shri Atul Gulati and Shri Arjun Bisht were was established in the year 1978 and got registered with Central Excise department in the year 1993 and surrendered their Central Excise registration in the year 2002. M/s. Emulsion Products is a partnership firm having two partners namely, Shri Atul Gulati and Shri Arjun Bisht, it was established in the year 1977 and got registered in the year 1997 and it has also surrendered Central Excise registration in the year 2002. 3. M/s. ADCL is located at Plot No.40, at Shed No. C, DLF Industrial Estate, Faridabad, M/s. SCPL is located at Plot No. 40, at Shed No. D,E and F, Industrial Estate, Faridabad and M/s. Emulsion Product is located at t Plot No. 40, at Shed No. A, B and I, Industrial Estate, Faridabad. The allegation of the Revenue is that M/s. SCPL and M/s. Emulsion Products are dummy units and manufacturing activities being undertaken by M/s. ADCL as the appellant did not have entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the statements of the employees, wherein it has been stated that some common employees were used in all the three units. To verify the said fact, the appellant sought cross-examination of those employees but the cross-examination was denied to them, on the ground that the statements were given by the employees voluntarily. Therefore, the finding of the adjudicating authority is baseless as the statement of employees cannot be relied upon until-unless opportunity of cross-examination is granted to the appellant. He further submits that, without admitting, even if some employees are common, then also it cannot be a ground to club the clearances of three units by holding that the units are dummy units. He further submits that Boiler and Generator Set is only common for all the units and the same cannot be a ground for clubbing the clearances as the units were having independent machineries to manufacture the goods manufactured by them independently. He also relied upon the CBEC Circular No. 6/1992 dated 26.05.1992 wherein it has been held Limited company whether public or private are separate entities entitled to separate exemption limit and clubbing of the clearances in such case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT 257 (SC) In these circumstances, ld. Counsel prays that impugned order be set-aside. 7. On the other hand, ld. AR opposed the contention of the ld. Advocate and submits that the units were located in the same Plot No. 40, Industrial Estate, Faridabad, moreover, all the units were having a common gate and employees in all the three units were common. He also submits that machineries installed in the factory were not complete to manufacture the final product. All the three units were managed by Shri Atul Gulati and to that effect, the statement of employees was recorded. In that circumstance, the clearances made by the appellants have been rightly clubbed and benefit of SSI exemption notification is rightly denied to them. To support his contention, ld. AR relied upon the decision in the case of Calcutta Chromotype Limited Vs. CCE, Calcutta - 1998 (99) ELT 202 (SC) and CCE, Pune Vs. Elemec Industries - 2000 (12) ELT 198 (Tri.). 8. Heard the parties and considered the submissions. 9. We find that in this case, all the three units were established way back in 1970s and all the units were registered with Central Excise department and having separate registrations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction was not given, she had made arrangements from M/s. Tandon Brothers situated nearby and installed a sub-meter for calculation of the actual consumption to be paid to M/s. Tandon Brothers. The petitioner also opened a separate bank account in the name of the unit and obtained limits from the bank. She has been operating the bank account herself. After starting manufacture of copper wires she submitted return in Form RT-12 to the Supdt. Customs and Central Excise. The first return was submitted on 7-10-1989. It was only on 29th August, 1990 that a notice was issued to the petitioner to show cause as to why the classification list effective from 1-4-1990 should not be approved taking into consideration the value of clearances of both the units as clubbed together. The only ground to issue such a notice was that the two factories are located adjacent to each other and that the proprietor of M/s. Tandon Brothers happens to be the father-in-law of the petitioner and that the work of both these units is being looked after by Shri Avinash Tandon who is the husband of the petitioner and son of Shri S.K. Tandon and that she has been consuming electric power from M/s. Tandon Brothers. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, the clearances made by three units cannot be clubbed in the light of the decision in the case of Plasto Containers (India) Pvt. Limited Vs. CCE, Nagpur - 2011 (268 ELT 509 (Tri. Mumbai), wherein this Tribunal has observed as under :- 34. In the case of CCE v. Electro Mechanical Corporation (supra) the Apex Court held that if there is no evidence to prove that there was mutuality of business interest or there was flow back of funds from one unit to another, it is not possible to hold that clearances of two units could be clubbed. The Hon ble Rajasthan High Court in the case of Renu Tandon v. Union of India - 1993 (66) E.L.T. 375. (in the facts, two units were situated in the same premises, manufacturing similar products, having common management, having common office and labour, having common electric connection and one unit was owned by father-in-law and other by daughter-in-law and both the units were being looked after by husband.) held that value of clearances could be clubbed unless mutuality of interest in the business of each other is proved by the Revenue. In this case the Revenue has failed to prove through evidence that there is a mutuality of interest. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at MACL had control over Hydrogen gas even after the stage of bottling till it was sold to the customers. The Balance-sheets and other financial statements of the three units revealed that whatever income they earned had gone to MACL in the form of lease rent of cylinders. One Mr. Sita Ram Goswami, Accountant of MACL and Mr. Ashok Kumar, Chief Operating Officer of MACL admitted that some amount of cash was also collected by MACL over and above the invoice prices of Hydrogen gas supplied by three companies. It was noted that while front companies were being supplied gas by MACL @ 0.50 per unit, till August 1996, the same gas was sold by the three companies @ ₹ 5/- per unit. Keeping in view all these factors the authorities were of the view that MACL had created the three companies with the fraudulent intention to avail benefit of exemption granted under Central Excise Notification No. 1/93, dated 28-2-1993 and has mis- declared the assessable value in the invoices with the intention to evade central excise duty. The facts in the case of Modi Alkalies are different from the case in hand before us as in the case of Modi Alkalies (supra) the main company and three separate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of small scale exemption the totality of the facts and circumstances had to be analysed. While with reference to isolated facts, the units may appear to be distinct and separate, but when the facts and circumstances are seen in totality seemingly distinct and separate units may turn out to be one common manufacturing entity. While the financial flow back could be one of the important considerations, it could not be made the sole basis for arriving at the decision, this way or that way. While the determining factor for clubbing of clearances is the true nature of relationship as between different units, the facts and circumstances of each case had to be appreciated. On the basis of the specific facts in a particular case, after the conclusions have been drawn, the case law could be cited to support the conclusions; but such a matter which largely depends upon the facts and circumstances relevant to the issue, no decision could be arrived at only on the basis of decisions in other cases with facts and circumstances specific to them. 12. Admittedly the issue of clubbing or declaring dummy units should be examined in the light of facts of each case. In the case in hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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