TMI Blog2018 (9) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... ein the assessee has to obtain registration for all the units therefore, the clearances made by one unit cannot be clubbed with the other unit - SSI exemption cannot be denied on account of clubbing of clearance. Clandestine removal - fake trading shown in the balance sheet - actual sales - Whether the fact of fake trading entries made in the balance sheet can be treated as clandestine removal or not? - Held that:- It is an admitted fact in the show cause notice itself recorded that both the units have shown fake trading. When Revenue itself is admitting in the show cause notice that entries are fake and without establishing the fact of manufacturing of the goods indicating how much inputs was required, how much goods have been produced, how much electricity has been consumed, in the absence of any such corroborative evidences, merely on the basis of fake entries which are to obtain loan from banks etc., it cannot be held that fake entries are of clandestine removal of goods - demand not sustainable. Under valuation - Revenue sought to include the value of hardware, labour charges and polishing charges done at the site of the buyers in assessable value - Held that:- As all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 22.03.2010. Their statements indicated that both the units were being run by Shri D.S. Sharma, that no bills/invoices were issued from the factory of DSW and the bills for the goods dispatched from the factory of DSW were being issued from the factory-cum-showroom of DSD, either from the invoice book of DSD or from the invoice book of DSW, salary of the persons working in DSW was being drawn from DSD; and there is no polishing facility at DSW and the same is done either at the factory of DSD or at the customer s premises. Though Shri D.S. Sharma in his statements dated 22/3/10 and 23/3/10 claimed that DSD and DSW are two separate and independent units, the above-mentioned statements of their employees indicated to the contrary. 4. During investigation, the officers also found that Income Tax officers on 07.02.2007 had conducted survey and search of the premises of DSD and DSW in the course of which, huge unaccounted sales had been unearthed. As a result of survey, while DSD in their revised balance sheet for 2005-2006 and 2006-2007 showed 50.57% and 69.07% increase in sales, DSW in the revised balance sheet of the same year showed 52.60% and 45.62 increase, respectively in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nits are Private Limited Companies, having different Directors and are located at a distance of more than 20 Kms. from each other and are having Central Excise registration from time to time. In that circumstances, it cannot be held that both the units are one and the same merely on the premise that two of the Directors in both the units are common and on the basis of some statements of the employees that the orders placed before one unit and the goods is cleared by another unit, cannot be the basis for clubbing the clearances made by both units. With regard to clandestine removal of goods, it is his submission that as per the balance sheet, the appellant has shown fake trading entries in the records to obtain favour from the banks for more advances and it is alleged in the show cause notice itself that it is a fake trading. Therefore, it cannot be held that there are actual sales by the appellant without establishing the fact that from where the raw material was purchased, the electricity consumption for plant and machinery, transportation of goods etc., the charges of clandestine removal is not sustainable merely on the basis of fake trading entries. To support this contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , submits that appellant has no case. 8. Heard the parties, considered the submissions. 9. On careful consideration of the submission made by both sides, we find that demands against the appellants have been raised on three grounds: (a) that both DSD and DSW are the same, therefore their sales are to be clubbed together. (b) the fake trading shown in the balance sheet is actual sales and (c) the appellant has undervalued their final goods. We deal with the each ground as under:- (a) Both DSD and DSW are the same, their sales are to be clubbed together- We find that in this case, both the units were manufacturing the same product and are Private Limited Companies. The Limited Company cannot be held to be a one Company. Moreover, both the units are situated at the distance of more than 20Kms. from each other and from time to time obtained Central Excise registration. As their clearances were below the SSI exemption limit, therefore, surrendered their Central Excise registration from time to time. The said registration was granted to them after ascertaining their correctness that the both the units are separate. In that circumstance, it cannot be said that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his ground is not sustainable. (c) Undervaluation : We have seen that the Revenue sought to include the value of hardware, labour charges and polishing charges done at the site of the buyers in assessable value. In fact, excise duty is payable at the time of clearance of the goods from the factory whereas the goods are to fitted at the buyer s place with the hardware and certain labour charges are required to be paid, thereafter, it is required to be polished. In case of door frame or window frames, they are embedded to earth and they become an immovable property. As all these activities have been done at the buyer s place and are part of immovable property, in that circumstances, activity conducted at the end of buyer s place such as hardware fitting, labour charges for polishing etc. cannot be included in the assessable value of the goods. Therefore, the charge of undervaluation is not sustainable against the appellants. 10. In view of the above, as all the issues have been answered in favour of the appellants, therefore, we set-aside the impugned order and allow the appeals filed by the appellants with consequential relief, if any. (Order dictated and pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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