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M/s. Penco Trade Chem (P) Ltd., Shri Dilip Kumar Jindal, Shri Jitendra Kumar Yadav, Shri Devendrakumar Raibali Yadav, M/s. Desmo Export Ltd. Versus Commissioner of Central Excise, Nashik

2017 (12) TMI 331 - CESTAT MUMBAI

SSI Exemption - dummy units - clubbing of clearances - N/N. 8/2001 - validity of SCN - Held that: - different SCN was issued to the units demanding separate duty from each of the Units. If the revenue is of the view that both the units are not independent and are same, in that case the SCN should have been issued only to the actual alleged manufacturer and the duty demand should have been made against it. - The SCN and the impugned order proceeds to demand duty from both the units without al .....

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er, 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. - Appeal No. E/1524 to 1527/07 & E/607 to 610/08 - Dated:- 30-11-2017 - Shri Ramesh Nair, Member ( Judicial ) And Shri Raju, Member ( Technical ) Shri V.S. Sejpal, Advocate for appellant Shri Sanjay Hasija, Supdt. (A.R) for respondent ORDER Per : Ramesh Nair These appeals have been filed by M/s .....

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ed show cause notice dt. 03.05.2006 to M/s Penco alleging that M/s Penco was floated by M/s Desmo Exports Ltd. who are also engaged in the manufacture of same products and both the units were availing SSI Exemption under Notification No. 8/2001. That the two companies were controlled by the same management having common shareholder wherein Shri Dilipkumar Jindal holds 97% of the shareholding. There was transfer of raw material from one unit to another, exchange of fund by providing unsecured loa .....

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th 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 same facts and grounds .....

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ntities with separate registration of all government departments like Sales tax, Income tax, ROC, having independent manufacturing structures. There is no dispute about separate set up. Both the companies are limited companies and independent manufacturers. That even the units were issued separate show cause notices, separate demands and even the demands were confirmed separately by respective jurisdictional adjudicating authority. The issue of independent show cause notice to each of the unit i .....

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lding 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. Th .....

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ex Court judgment in case of M/s Euro Scaff (India) Ltd. Vs. Commissioner 2015 (323) ELT A124 (SC) upholding the Tribunal s order wherein the Tribunal held that the Circular No. 6/92 is not applicable in case of lifting of corporate veil. 5. We have carefully considered the submission made by both sides and perused the records. 6. We find that different show cause notice was issued to the units demanding separate duty from each of the Units. If the revenue is of the view that both the units are .....

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