TMI Blog2018 (11) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... But in this case, duty has been demanded separately from both the units, which also shows that the adjudicating authority is in doubt to conclude that which is the principal unit - clubbing of clearances not justified - decided in favor of assessee. Clandestine removal - reliability on statements of persons based on which charge of clandestine removal is based - Held that:- During the course of cross examinations, Sh. Rahul Jain, one of the supplier, appeared who stated that he has issued the invoices in the name of M/s KCKL and received the payment from M/s KCKL, therefore, the statement of Sh. Rahul Jain during the course of cross examination established that M/s KCKL was a trading firm and was not a dummy firm as alleged by the Revenue. Moreover, the other witnesses whose statements have been relied upon, were not cross examined despite the direction of this Tribunal, therefore, the statements of these witnesses are not admissible to allege the clandestine removal of the goods - thus, clearances made on the invoices of M/s KCKL cannot be held as clandestine removal goods by M/s DST. The charge of clubbing of units in the absence of determining which is the principal unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed. Against those orders, the appellants were preferred the appeals before this Tribunal and this Tribunal remanded back the matter to the adjudicating authority and in remand proceeding, the adjudicating authority passed the following order, against which the appellants are before us:- Re. SCN C.No. NZU/INV/48/LRU/2002/2322-26 dt. 06.08.2002 (i) I confirm the duty demand of ₹ 80,23,728/- against M/s Dharam Steel Tubes Pvt Ltd under the proviso to sub-section (1) of Section 11A of the Act alongwith interest at the applicable rates in terms of Section 11AB of the Act. I order adjustment of the amount of ₹ 6,00,000/- deposited by M/s Dharam Steel Tubes Pvt Ltd during the course of investigation towards the demand confirmed under this order. (ii) I confirm the duty demand of ₹ 10,95,852/- against M/s K.C. Pipes Pvt Ltd under the proviso to sub-section (1) of Section 11A of the Act alongwith interest at the applicable rates in terms of Section 11AB of the Act. I order adjustment of the amount of ₹ 77,242/- deposited by M/s K.C. Pipes Pvt Ltd during the course of investigation towards the demand confirmed under this order. (iii) I im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Rules, 2002. Re. SCN C.No. V(15)SCN/82/2005/387-388 dt. 30.06.2005 (i) I confirm the demand of ₹ 13,63,635/- against M/s Dharam Steel Tubes Pvt Ltd under Section 11A of the Act alongwith interest at the applicable rates in terms of Section 11AB of the Act. (ii) I impose penalty of ₹ 13,63,635/- on M/s Dharam Steel Tubes Pvt Ltd under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002. (iii) I impose penalty of ₹ 13,63,635/- on M/s K.C. Pipes Pvt Ltd under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002. I retain from imposing any penalty on Sh. Rajinder Kumar, Accountant of M/s Dharam Steel Tubes Pvt Ltd, Samana. This order is without prejudice to any other action that may be taken against the Noticees under the Act or the Rules framed thereunder or any other law of the land for the time being in force. 4. Ld. Counsel for the appellants submits that the clearances of M/s DST are not liable to be clubbed with the clearances of M/s KCP as both the units are private limited companies. As per CBEC Circular No. 6/92-CE dt. 29.05.1992, the clearances of limited compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not liable to be clubbed. 4.4 Ld. Counsel also relied on the following case laws:- - Devilal Kutir Soap vs. CCE 2016 (340) ELT 258 (Tri.) - Venkalesh Yedidlra vs. CCE 2016 (332) ELT 860 (Tri.) - CCE vs. Sharad Industries 2013 (294) ELT 561 (Tri.) - Summarking Electronics vs. CCE 2004 (176) ELT 302 (Tri.) - D.M. Gears Pvt Ltd. vs. CCE 2002 (141) ELT 514 (Tri.) - Superior Products vs. CCE 2002 (144) ELT 187 (Tri.) - Sri Natraja Industries vs. CCE 2005 (187) ELT 45 (Tri.) - Unity Industries vs. CCE 2006 (193) ELT 314 (Tri.) - Shree Krishna Minerals vs. CCE 2005 (190) ELT 251 (Tri.) - Jindal Steel Fabricators vs. CCE 2005 (180) ELT 238 (Tri.) - International Dye Stuff vs. CCE 1991 (53) ELT 95 (Tri.) - Geeta Valves Engg. Ltd. vs. CCE 1996 (87 ) ELT 672 (Tri.) - Padma Packing P. Ltd. vs. CCE 1997 (90) ELT 175 (Tri.) 4.5 Ld. Counsel further submits that the clandestine clearances are based only on conjectures and surmises and not on any evidence on the record. Therefore, demand cannot be confirmed only on the basis of assumption and presumption and the allegation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the parties, we find that demand has been confirmed by the issuance of various show cause notice to the appellants on account of clubbing of their clearances and on account of clandestine clearance of goods by M/s DST on the invoices of M/s KCKL. (A) Issue of clubbing:- 7.1 We find that in this case although both the units are being managed by Sh. Shiv Kumar Goel and Sh. Yash Pal Goel, but are two separate private limited companies located at two separate locations and are having their own separate plant and machinery to manufacture their final products. We also take note of the fact that in the impugned order, the adjudicating authority has alleged that there is a flow of the funds between two units. The said issue has been examined and we find that if any amount is transferred from one company to another, the same has been returned back within reasonable time, then it cannot be alleged that there was a flow of the funds. Moreover, the allegation that too from M/s DST, the amount has been withdrawn by the shareholders to purchase the shares of M/s KCP, cannot be a reason of clubbing of clearances. Further, we find that as both the units are having separate locations and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the principal unit and not from both the units. Where the duty has been demanded from both the units, it would rather lead to an inference that the Revenue has recognized implicitly both of them as independent units. This proposition of law flows from the Apex Court judgment in the case of Gajanan Fabrics Distributors v. CCE, Pune - 1997 (92) E.L.T. 451 (S.C.). In the instant case, we find that in the show cause notice, it has not been disclosed that which out of the two firms, was a principal firm and which was a dummy one. Only inter se relationship of the partners of both these firms and availment of certain facilities by them commonly, had been alleged in the show cause notice. The duty demand had been raised against both of them. The adjudicating authority also accordingly confirmed the duty demand against both the firms with penalties. The order of the adjudicating authority being contrary to the law laid down by the Apex Court in the above referred case, in our view, has been rightly set aside by the Commissioner (Appeals). The view taken by this Tribunal in the above case has been affirmed by the Hon ble Apex Court. 7.4 We further find that in the case of Nova ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty; (c) discovery of such finished goods outside the factory; (d) instances of sale of such goods to identified parties; (e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him; (f) use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty; (g) statements of buyers with some details of illicit manufacture and clearance; (h) proof of actual transportation of goods, cleared without payment of duty; (i) links between the documents recovered during the search and activities being carried on in the factory of production; etc. Needless to say, a precise enumeration of all situations in which one could hold with activity that there have been clandestine manufacture and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heory of preponderance of probability would be applicable only when there are strong evidences heading only to one and only one conclusion of clandestine activities. The said theory, cannot be adopted in cases of weak evidences of a doubtful nature. Where to manufacture huge quantities of final products the assessee require all the raw materials, there should be some evidence of huge quantities of raw materials being purchased. The demand was set aside in that case by this Tribunal. None of these parameters has been made out by the Revenue to allege clandestine removal by M/s DST, therefore, clearances made on the invoices of M/s KCKL cannot be held as clandestine removal goods by M/s DST. 7.6 In alternate, we also find that if the charge of clandestine removal has to be found correct and the clearances on the invoices of M/s KCKL by M/s DST, then also the clearances of M/s DST remain below the threshold limit of SSI exemption. In these circumstances also, no demand is sustainable against M/s DST on the account of clandestine removal of the goods. 8. In view of the above discussion, we hold that the charge of clubbing of units in the absence of determining which is the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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