Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2017 (12) TMI 331

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ing as to which of the unit is actual manufacturer and which is dummy manufacturer. Such issuance of separate SCN and separate demand from each of the units itself recognizes the separate and independent legal entity of each unit - the ratio of Hon’ble Supreme Court judgment in the case of Gajanan Fabrics Distributors [1997 (5) TMI 50 - SUPREME COURT OF INDIA] is squarely applicable, where it was held that By confirming the demand upon all the seven units the Collector appears, however, to have treated them all as assessees and, implicitly recognised their independent existence - no demand of duty can be made from the Appellants. Appeal allowed - decided in favor of appellant. - E/1524 to 1527/07 & E/607 to 610/08 - A/91060-91067/2017 - .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... n the functioning of the units and in communications with the bank and on records, letters, balance sheet as director in both the companies. The shareholders of the two companies were giving loans to the companies which was equal to the dividends received by them. Thus both the companies are controlled by the same management and that M/s Penco Trade Chem has been floated by M/s Desmo Exports to enjoy the SSI Exemption separately. It was thus proposed to club the clearances of both the units and to deny SSI exemption benefit on the ground that the combined clearance of both the companies exceeded the SSI Exemption limit. The adjudicating authority confirmed the demands against M/s Penco and imposed penalties vide Order dt.31.08.2007. On the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... st each of the company without holding in any of the SCN as to which company should be liable for duty. That even if both the companies are under the same management it does not mean that it is of the same manufacturer. He relies upon the CBEC Circular No.6/92 dt. 29.05.92 and decision of the Hon ble Supreme Court in case of Supreme Washers Ltd. Vs. CCE - 2002 (53) RLT 753 (SC) to submit that it was held that limited companies, whether Public or Private are separate legal entities, distinct from the shareholders composing it. That there is no instance of pervasive financial or management control. He has also made submission on each of the allegation made in the show cause notice and the impugned orders. 4. On the other hand, Shri San .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ch is dummy manufacturer. Such issuance of separate show cause notice and separate demand from each of the units itself recognizes the separate and independent legal entity of each unit. Thus in view of such facts we find that the ratio of Hon ble Supreme Court judgment in the case of Gajanan Fabrics Distributors supra is squarely applicable and no demand of duty can be made from the Appellants. Since we hold that the demand of duty is not sustainable, consequently penalty is also not imposable as per the Hon ble Supreme Court judgment in case of M/s Gajanan Fabrics. We are not inclined to go into the other pleas raised by the Appellants. In view of our above findings and reasons, we set aside the impugned order and allow the appeals with c .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates