TMI Blog2017 (12) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... o 1.10.2003 has to be clubbed with that of the appellant company does not make legal sense. As already mentioned, the corrugated boxes became leviable to central excise duty only with effect from 1.3.2001. Clubbing of clearances of clearances of M/s. AGK Packers - dummy units - Held that: - When M/s. Packers India was taken over by the appellant company, which is a company registered under the Companies Act, the said unit could no longer be considered as a separate unit so as to club the clearances of the unit alleging it to be a dummy unit of the appellant company - Merely because Shri T. Kumararaj and Shri T. Asokan are active partners in M/s. AGK Packers and also the appellant company, it cannot be said that M/s. AGK Packers is a dummy unit of the appellant-company. Validity of SCN - separate notice has not been issued to M/s. AGK Packers and M/s. Packers India, though the department alleges that these are dummy units - Held that: - The Tribunal in various cases has taken a consistent view that the dummy unit has also to be put into notice for clubbing the clearances with another unit especially when the element of their independent existence is denied - non issuance of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded from both the partners and the partnership deeds as well as the memorandum of association were examined. The department came to the following conclusion:- (i) The profit / loss of the firm was shared only between S/Shri. T. Kumraraj, T. Asokan and S. Gananapraksam during he period from 01.04.2001 to 31.08.2003. to the exclusion of other partners S/Shri. R.Sundararanan, S.Vinoth and P.K.Ramalingam; (ii) There were no evidences with regard to contribution of capital by S/Shri. R.Sundararajan, S.Vinoth and P.K. Ramalingam nor there was any payment of interest or any other remuneration to them: (iii) For the financial year 2001-02 it is seen that there were three partners only (1) Shri. T.Kumararaj, (2) Shri.S.Gnanaprakasam, and(3) Shri. T. Asokan as per Books of Accounts of Packers India which was audited and the loss of ₹ 1,32,004/- during the year was distributed among them in equal share; (iv) During the year 2002-03 also, the net loss of ₹ 3,36,034/- was distributed among the above 3 partners equally; (v) Since Shri. S. Ganaprakasam retired from the firm on 31.08.2003, his capital account was closed on 31.08.2003 and current account was cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd T. Asokan. In appeal, Commissioner (Appeals) set aside the same. Hence, Revenue has come in appeal before the Tribunal. 4. On behalf of Revenue, ld. AR Shri A. Cletus reiterated the grounds of appeal. He submitted that the Commissioner (Appeals) erred in not appreciating the evidences considered by the original authority. The partnership deeds in respect of M/s. Packers India effective from 1.4.2001 was admitted by T. Kamaraj to be created only for the purpose of bank loan and that it did not come into force at all. That this aspect is corroborated by the statement of Shri S. Vinoth who is a silent partner. None of these partners contributed towards capital nor had they received any profit or loss from the firm. They were included in the partnership deed only for the purpose of obtaining bank loan and since the loan was not obtained, the partnership deed did not come into effect. Further, the Chartered Accountant of the above firm/company deposed that the partners of M/s. Packers India and M/s. AGK Packers were Shri T. Kumararaj, Shri T. Asokan and Shri S. Gnanaprakasam. Though the partnership deed dated 1.4.2001 in respect of M/s. Packers India contained these names, the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. AGK Packers and Packers India during the period 2001 02 and 2002 03. He, therefore, prayed that the order passed by the Commissioner (Appeals) may be set aside and the order passed by the adjudicating authority may be restored. 6. None appeared for the respondents, though notice was issued. The matter is taken up for disposal after hearing the ld. AR and perusal of records. 7. The allegation of the department is that the clearances made by M/s. Packers India for the period till it was taken over by the appellant-company as well as the clearances of M/s. AGK Packers, another partnership firm is to be clubbed with the clearances of the appellant-company and to be treated as one unit so as to deny SSI exemption as the turnover after clubbing exceeded the prescribed limits. In this context, it is to be first mentioned that the appellant company was incorporated in the year 1989 and has later taken over the assets and liabilities of M/s. Packers India with effect from 1.10.2003. After such takeover of the assets and liabilities, M/s. Packers India, in our view, does not have any individual existence. So the contention of the department that the clearances made by M/s. Packers I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and M/s. Packers India, though the department alleges that these are dummy units. The Tribunal in various cases has taken a consistent view that the dummy unit has also to be put into notice for clubbing the clearances with another unit especially when the element of their independent existence is denied. In the case of Commissioner of Central Excise, Chennai Vs. Urbane Industries reported in 2015 (325) ELT 726 (Mad.), the Hon ble jurisdictional High Court had occasion to analyze a similar issue and held that non issuance of show cause notice to the alleged dummy unit would vitiate the proceedings. In our view, the Commissioner (Appeals) has rightly analysed the issue and followed the decisions of the Tribunal as under:- (a) Aroma Apparels Vs. Commissioner of Central Excise - 1988 (25) ELT 90 (b) Commissioner of Central Excise vs. Shiva Exim Enterprises - 2005 (185) ELT 169 (Tri. Del.) (c) Commissioner of Central Excise Vs. Goyal Fibres Pvt. Ltd. - 2009 (234) ELT 108 (Tri.) (d) Rao Industries Vs. Commissioner of Central Excise - 2009 (237) ELT 128 (Tri. Bang.) 10. Apart from the above, the CBEC Circular No. 6/92 dated 29.5.1992 clarifies that the cle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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