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TMI Blogadjustment of demand with other unitX X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment of demand with other unit X X X X Extracts X X X X X X X X Extracts X X X X ..... e other unit being having a common partner. Both the units are manufacturing different products. Pls advice the legal course of this situation. Arun Reply By MADAN RAHEJA: The Reply: Action of department is not legally sustainable. It is not a case where one unit has been established a dummy unit of the other. There are numerous CESTAT decisions to the effect that mere commonality of one or m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore partners in two units is not sufficient to hold them as a single unit for denying SSI benefit or for treating them as related person for purpose of valuation under Central Excise. Same analogy is applicable in your case. The legal course of action would be filing appeal if refund is denied this way. Reply By arun aggarwal: The Reply: Thanx Any citation or circular would be really helpful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arun Reply By MADAN RAHEJA: The Reply: On this issue there is a very old circular of Board i.e Circular number 6/92 dated 29-5-1992 issued from F. No. 213/15/1992-CX. 6. This circular is related to clubbing of clearances for denial/admissibility of benefit of SSI exemption, it is clearly stated in this circular that "If there are two firms with only some of the partners in common, each firm is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to separate exemption limit and hence the question of distributing the exemption may not arise". This circular was relied in the case of B.K.Office Needs reported at 2015 (4) TMI 241 - CESTAT CHENNAI I am of the view that on same analogy, recovery of dues of a firm cannot be done by denying refund to another firm with one common partner. Relevant para of this circular is re-produced bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow for your information The question whether different partnerships having common partners, are treatable as separate manufacturers of the same manufacturer, would be a question of fact in each case to be determined on the basis of such factors among other, like composition of the partnership, existence of the factory, licence, nature of goods manufactured etc. Different firms will be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different manufacturers for the purpose of exemption limit. But if a firm consisting of certain partners say A.B. & C. has got more than one factory, all these factories should, of course, be combined. Limited companies whether public or private, are separate entities distinct from the shareholders composing it. Hence each limited company is a manufacturer by itself and will be entitled to a separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate exemption limit. If there are two firms with only some of the partners in common, each firm is entitled to separate exemption limit and hence the question of distributing the exemption may not arise. If one firm or one individual owns several factories, he or it gets exemption only in respect of one lot and the manufacturer being only one entity, there will be no question of distributing the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption. Whether or not in the expression 'by or on behalf of a manufacturer' the expression 'from one or more factories' is added, the effect would be the same if the manufacturer is also the same. The expression 'one or more factories' only further clarified that whether the factory is one or more, it is the clearances by or on behalf of the same manufacturer which is to be taken into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for purpose of interpreting the exemption Notification. The matter requires to be viewed accordingly. Reply By arun aggarwal: The Reply: Thanks a lot sir. Arun Reply By rajkumar shukla: The Reply: Unless it is held thru quasi judicial proceedings that both units are same, the refund can not be adjusted. in absence of any such order arising out of such proceedings( which in itself is appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alable) refund can not be adjusted X X X X Extracts X X X X X X X X Extracts X X X X
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